UnityPoint Health And Presvyterian Healthcare Services Scrap Merger Plans

UnityPoint Health, headquartered in Des Moines, Iowa, and Presbyterian Healthcare Services, based in Albuquerque, New Mexico, have disclosed that they have abandoned their efforts to pursue a merger. 

About UnityPoint Health:

• UnityPoint Health comprises 20 regional hospitals and 19 community network clinics. 
• It boasts a workforce of approximately 32,000 employees and registered nearly 8 million patient visits in 2021. 
• It reported total operating revenues of $4.5 billion, an operating loss of just over $185 million, and a net loss of $777 million the following year.
• It had earlier made attempts to merge with Sanford Health, a 76-hospital deal worth $11 billion, which was ultimately abandoned in late 2019.

The proposed cross-market agreement, initially introduced in March, aimed to establish a formidable 48-hospital system generating approximately $11 billion in annual revenue.

In a joint statement, Presbyterian CEO Dale Maxwell said, “Our goal for this partnership was to strengthen local, not-for-profit healthcare in the face of mounting cost pressures across the industry. 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.”

While the announcement didn’t provide specific reasons for terminating the agreement, Maxwell informed the Albuquerque Journal that regulatory approvals were not a contributing factor to this decision.

Simultaneously with the dissolution of the deal, it was reported that Clay Holderman, President and CEO of UnityPoint, has left the company. Scott Kizer, who previously held the positions of President and Chief Legal Officer, has assumed the leadership role and is currently listed as the top manager on the firm’s website.

A UnityPoint spokesperson confirmed Kizer’s new responsibilities and noted that Holderman, who was notably absent from the joint announcement on Thursday, will be leaving the firm to explore other professional alternatives. The representative declined to provide further details.

On the other hand, Presbyterian consists of nine New Mexico-based hospitals, a for-profit healthcare management company, a multi-state medical corporation, and several affiliated entities. It holds the distinction of being the largest private employer in the state of New Mexico, with a workforce of over 13,000 employees.

For the fiscal year 2022, which concluded on December 31, the organization generated in excess of $5.5 billion in overall operating revenues. However, it reported an operating deficit of $105.4 million and a net loss of $377 million. Maxwell, representing Presbyterian, informed the media that the system continues to grapple with these financial challenges subsequent to the merger’s dissolution. Nevertheless, he emphasized that the decision to terminate the merger will not result in any of his employees losing their positions.

Had the merger been successfully executed, the collaborative system would have extended its reach to more than 4 million patients within their respective markets. The two organizations had emphasized the potential for “administrative efficiencies,” which they believed would facilitate increased investments in clinical excellence, digital advancement, workforce enhancement, and the promotion of value-based care.