Des Moines, Iowa-based UnityPoint Health and Albuquerque, New Mexico-based Presbyterian Healthcare Services are no longer working toward a merger, the systems announced Wednesday.
The cross-market deal, first announced back in March, would have yielded a 48-hospital system with about $11 billion in annual revenue.
“Our goal for this partnership was to strengthen local, not-for-profit healthcare in the face of mounting cost pressures across the industry,” Presbyterian CEO Dale Maxwell said in a joint statement. “At Presbyterian, that goal remains unchanged with today’s news. We will continue to explore new ways to address these structural shifts in healthcare so we can invest in clinical innovation and our workforce. We will remain focused on building a sustainable path forward to serve New Mexicans for generations to come.”
The announcement did not specify why the organizations called off the deal, though Maxwell told the Albuquerque Journal that regulatory approvals didn’t play a role in the decision.
Concurrent with deal’s unraveling came reports that UnityPoint’s president and CEO, Clay Holderman, has departed is leaving the organization. Scott Kizer, previously president and chief legal officer, has reportedly stepped into the gap and is listed on UnityPoint's website as the current top executive.
A representative of UnityPoint confirmed Kizer's new roles and that Holderman—who was not quoted in Thursday’s joint announcement—"will depart the organization to explore other professional opportunities." The representative declined any further comment.
UnityPoint Health is the broader of the two organizations with 20 regional hospitals and 19 other community network hospitals. It employs about 32,000 people and logged nearly 7.9 million patient visits in 2021. It reported $4.5 billion in total operating revenues, a $185.4 million operating loss and a $777.7 million net loss in 2022.
UnityPoint had previously sought to merge with Sioux Falls, South Dakota-based Sanford Health, though the $11 billion, 76-hospital megadeal was nixed in late 2019.
Presbyterian, meanwhile, comprises nine New Mexico hospitals, a for-profit health maintenance organization, a multistate medical group and other affiliated organizations. It’s the state of New Mexico’s largest private employer with over 13,000 employees.
For the 2022 fiscal year ended Dec. 31, it brought in over $5.5 billion in total operating revenues but logged a $105.4 million operating loss and a $377 million net loss. Presbyterian’s Maxwell told press that the system is still facing those financial difficulties following the merger’s collapse, but that the decision to call off the combination will not cost any of his employees their jobs.
Were the deal to have gone through, the joint system would have reached more than 4 million patients across the systems’ respective markets. The pair had highlighted “administrative efficiencies” that they said would allow for increased investment in clinical quality, digital innovation, workforce development and value-based care.
“We believe this decision [to call off the merger] allows us to better meet the needs of our patients, team members, communities and key stakeholders,” UnityPoint Health Board Chair Sally Gray said in the announcement. “As we move forward, UnityPoint Health is focused on identifying new, innovative ways to deliver low-cost, high-quality care to those we serve.”