Trinity Health Mid-Atlantic abandoned its plan to acquire Tower Health's Chestnut Hill Hospital in January 2022, part of a broader trend where over 29 hospital mergers, acquisitions, and partnerships were called off in recent years. Notable cancellations include Community Health Systems' $120 million sale of Commonwealth Health and Novant Health's $320 million acquisition of two hospitals, both facing regulatory hurdles. Other significant deals, such as the merger between Presbyterian Healthcare Services and UnityPoint Health, were also terminated after extensive negotiations.
Providence reported a $208 million operating loss in Q3 2023, despite a revenue increase to $7.6 billion, driven by higher patient volumes. For the nine months ending September 30, the health system posted a $155 million operating loss, an improvement from $857 million the previous year, while investing $1.3 billion in community benefits. Leadership emphasized ongoing strategies to enhance performance amid rising labor and supply costs.
The United States integrated delivery network (IDN) market, valued at USD 21.5 trillion in 2023, is projected to grow at a CAGR of 8.9%, reaching USD 50.5 trillion by 2033. Hospitals dominate the market, driven by advanced treatment facilities and favorable reimbursement policies, while vertical integration enhances comprehensive care across various medical specialties. Key players include HCA Healthcare and Providence, with significant investments aimed at improving patient care quality.
Providence CEO Rod Hochman declared "old-school M&A is dead," emphasizing a shift away from traditional hospital acquisitions. Instead, Providence is focusing on collaboration and transformation, exemplified by its role in Longitude Health, a partnership aimed at addressing key healthcare challenges. The health system is also expanding into ambulatory care and enhancing revenue cycle management through strategic partnerships.
Longitude Health has been established by Baylor Scott & White Health, Memorial Hermann Health System, Novant Health, and Providence to enhance healthcare solutions for patients. Led by CEO Paul Mango, the organization aims to invest in performance solutions over the next five years, focusing on cost, quality, access, and patient experience. The initiative seeks to attract additional high-performing health systems to join its mission of delivering high-quality, affordable healthcare.
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