A proposed merger between Presbyterian Healthcare Services and Iowa-based UnityPoint Health is no longer happening, Presbyterian CEO Dale Maxwell told the Journal.
The merger, first announced in March and aimed at consolidating administrative functions and easing cost burdens, fell apart earlier this week for undisclosed reasons. It would have created a massive health care conglomerate. The combined value of the companies after the merger had been estimated at $11 billion.
Maxwell wouldn’t specify why the deal fell through, adding that Presbyterian is open to other options going forward.
If the deal would have gone through, UnityPoint Health and Presbyterian would have combined to operate a “parent organization,” health systems officials said.
The merger would have brought under one roof administrative functions, which would have reduced duplication and promoted greater efficiency, Maxwell said. For example, the two health systems could have combined electronic health records since both use the privately held Epic Systems Corp.
In order to complete the merger, the health systems had to get approval from federal and state agencies, including the IRS, Federal Trade Commission and state Attorney General’s Office. But Maxwell said approvals were not an issue in the unraveling.
Presbyterian is looking to restructure because of budget shortfalls. The health system’s operations budget was down $105 million in 2022, which moved the board of directors to explore options to reduce costs. Maxwell at the time described Presbyterian’s fiscal challenges as structural, not cyclical.
Maxwell said jobs and patients at Presbyterian won’t be affected because the deal fell through.
“Not pursuing this is not going to have a negative impact on any single individual,” he said.
The merger would have created a health system overseeing 4 million patients and employing a combined staff of 40,000, including thousands of physicians.
UnityPoint operates hospitals in Iowa, Illinois and Wisconsin. PHS, which includes Presbyterian Health Plan and Presbyterian Delivery System, serves more than 900,000 patients across the state with its nine hospitals, scores of clinics and 13,000 employees.
“We believe this decision allows us to better meet the needs of our patients, team members, communities and key stakeholders,” said Sally Gray, board chair of UnityPoint Health. “As we move forward, UnityPoint Health is focused on identifying new, innovative ways to deliver low-cost, high-quality care to those we serve.”
This story will be updated.