Intermountain Healthcare, SCL Health Finalize Healthcare Merger

Intermountain Healthcare and SCL Health have finalized their healthcare merger to create one of the largest nonprofit health systems in the country.

The merged health system consists of 33 hospitals—eight hospitals in Colorado and Montana owned by SCL Health, 24 Intermountain Healthcare hospitals in Utah, Idaho, and Nevada, and one virtual hospital operated by Intermountain.

The combined health system employs more than 59,000 caregivers, operates 385 clinics across seven states, and offers health insurance to one million people in Utah and Idaho.

The new organization will go by Intermountain Healthcare, with Intermountain assuming the role as the parent company. All SCL Health subsidiaries will be included in the consolidated entity.

“With this merger, we’ll create a model for the future of healthcare that focuses on keeping people healthy and proactively addresses causes of illness through high-quality, affordable, and accessible care to more patients,” Marc Harrison, MD, president and chief executive officer of Intermountain Healthcare, said in the press release. “The merger provides a model for healthcare for the rest of the country.”

Harrison has assumed the role of president and CEO of the newly merged health system.

Intermountain and SCL Health first announced merger plans when they signed a letter of intent in September 2021. The two nonprofits said they shared the goal of prioritizing patient and provider wellbeing amid ongoing COVID-19 challenges.

The completion of the merger comes shortly after the Colorado Department of Law approved the deal.

Lawmakers were required to conduct a review of the merger as a part of the Colorado Hospital Transfer Act. Because the health systems are nonprofits, the evaluation had to ensure the merger would not result in a material change to the charitable purposes of the health systems and that no material amount of hospital assets would leave the state of Colorado following the transaction. 

The department confirmed that the merger met both conditions and allowed it to proceed without further review.

“The Department of Law takes seriously our duty under the state Hospital Transfer Act when nonprofit hospital systems propose transactions of this type. Based on our thorough review of the SCL Health merger with Intermountain, we determined the charitable purposes of SCL Health and its hospitals in Colorado will not materially change and no assets will leave the state as part of the transaction,” Chief Deputy Attorney General Natalie Hanlon Leh, said in a press release.

“We received input from community members who reached out to department attorneys during our review. We will monitor SCL Health’s hospitals in Colorado over the next five years to safeguard that their charitable purposes are maintained, and Colorado communities continue to be served.”

Additionally, the department determined that the merger would not reduce the availability or accessibility of healthcare services for patients in the community.

SCL Health will undergo corporate governance changes due to the merger, but its hospitals in Colorado will operate according to existing practices, the announcement noted. In addition, SCL Health’s seven Catholic hospitals will keep their Catholic names.

The health systems said there would be no material layoffs or downsizing nor do they intend to move, close, or consolidate clinical facilities following the merger.

Healthcare mergers and acquisitions have been a hot topic recently in the healthcare industry. Stakeholders cannot seem to agree on the impact mergers have on costs, care quality, and patient outcomes.

Recently, officials have blocked a series of healthcare mergers, citing concerns that the deals would reduce competition.

For example, a federal appeals court blocked the proposed merger between Hackensack Meridian Health and Englewood Health. In addition, the Department of Justice recently filed a civil lawsuit to stop UnitedHealth Group from acquiring Change Healthcare.