SCL Health

A letter of intent has been signed for the merger by two nonprofit health systems; SCL Health and Intermountain Healthcare, based in Broomfield, Colorado, and Salt Lake City, Utah respectively.

The finalized merger agreement is planned to be signed at the end of the year, followed by customary approvals.

If the plan goes smoothly, the merged companies would lead to the employment of over 58,000 caregivers and operate across six states with 385 clinics, providing approximately 1 million people with health insurance coverage.

The newly merged companies will take on Intermountain as its name, and have a headquarter in Salt Lake City, with a regional office in Colorado which is SCL’s location. SCL is a faith-based organization and its 7 Catholic hospitals would continue with their current practices including religious branding.

Lydia Jumonville, SCL President and CEO, will retain her position for an integration period of two years, after which she will transition to a board position on the new system. Intermountain’s president and CEO Dr. Marc Harrison will be the leader for the merged organization.

The two companies are pitching this merger proposition as a model for how secular and faith-based organizations can join together to expand on their missions.

“SCL Health and Intermountain are pursuing our merger from positions of strength,” Lydia Jumonville stated. “We are two individually strong health systems that are seeking to increase care quality, accessibility, and affordability. We will advance our missions and better serve the entire region together.”

The merger’s future could be jeopardized as a crackdown on hospital consolidation has been directed under President Biden’s executive order. The order states that such mergers leave areas, rural communities especially, without affordable and convenient healthcare services. Furthermore, this is encouragement for the Federal Trade Commission (FTC) and the Department of Justice (DoJ) to revise their issued merger guidelines and to enforce antitrust laws, ensuring patients face no harm from hospital mergers.

The FTC gave the announcement that it was going through an adjustment for its review process as a result of a huge influx of merger filings.

Integration and scale-up may bring benefit to community needs, especially during a pandemic, said hospital advocacy groups which included the Federation of American Hospitals and the American Hospital Association as a push back to President Biden’s orders.

Even with President Biden’s restrictive order, a rising number of hospital mergers and acquisitions were seen recently, with 13 announced deals in the first quarter of 2021, as compared to a total of 29 in 2020. Moody’s Investors Services expects this trend to continue.

The FTC began an investigation searching for results on how mergers in the past have had an impact on competition, hoping to use its findings to polish its merger program.

In the past year, an attempt was made for Intermountain to merge with Sanford Health but due to a leadership change at Sanford, this could not materialize.

With a spike in Covid-19 cases, as well as hospitalizations, this week Intermountain shared that it was postponing non-urgent procedures and surgeries that require hospital admission.

“We’re excited to merge with SCL Health to usher in a new frontier for the health of communities throughout the Intermountain West and beyond,” Harrison said in a statement.