From left, John M. Murphy, MD, president and CEO of Nuvance Health, shakes hands with Northwell President and CEO Michael Dowling at a signing ceremony last year.
Photo courtesy of Northwell Health
Northwell Health and Nuvance Health’s roughly $18 billion proposed merger, which has been in the works since last year, has received final regulatory approval from the Connecticut Office of Health Strategy, the organizations announced this week.
Under the agreement, ownership of Danbury, Norwalk, including a new Milton campus and Sharon Hospitals, will be transferred to Northwell Health, a 21-hospital non-profit integrated care delivery system headquartered in New Hyde Park, New York.
The merger will create a 28-hospital system, as Northwell is also becoming the parent organization for three Nuvance hospitals in New York.
As part of the affiliation, Northwell will invest at least $1 billion across the Nuvance hospitals in Connecticut and New York over the next five years, and the agreement also requires annual reports detailing Northwell’s progress made toward completion of those investments.
The agreement also prohibits any real estate sale leaseback transactions for at least five years.
WHAT’S THE IMPACT
There are also a number of specific conditions, including constraining growth in commercial prices so negotiated rates do not exceed the average of the state’s Cost Growth Benchmark Target and the Consumer Price Index for Medical Care in New England.
The deal also requires adoption of Northwell’s more generous financial assistance policies at Nuvance hospitals, and maintenance of all inpatient clinical services and recognition of all collective bargaining agreements.
In addition, the health systems will be tasked with developing strategic plans to retain and enhance healthcare services at each of the hospitals, including physician recruitment and resource commitments for clinical service programming.
Also included as a special condition is that the health systems will need to promote advanced alternative payment models with payers to improve population health, reduce the rate of unnecessary cost or utilization growth, improve access to primary care and address social determinants of health.
The settlement also aligns with and incorporates the agreement of assurances Connecticut Attorney General William Tong and New York Attorney General Letitia James reached with the systems in August, including the preservation of labor and delivery services at Sharon Hospital for the next five years. Four New York hospitals currently operated by Nuvance will also join the Northwell system.
At that time, the two organizations said their combined strengths will help advance the level of care for patients in New York and Connecticut, where, respectively, Northwell and Nuvance are headquartered. The new regional system will boast a network of 14,500 providers and more than 1,000 sites of care, including 28 hospitals.
THE LARGER TREND
The approval by the Connecticut Office of Health Strategy was the last hurdle to the merger.
New York’s Public Health and Health Planning Council signed off on the deal in September 2024, with the two organizations operating independently until final approval from Connecticut.
The deal for Northwell to acquire Nuvance was announced in February 2024.
When the New York and Connecticut state AGs gave the green light to the merger in August, the two health systems highlighted a few perceived benefits of the new integrated health system, including increased capacity to invest in medical advancements and innovation. Local communities would have access to coordinated care across western Connecticut, the Hudson Valley, New York City and Long Island, the systems said. The care delivered in these sites would span the full range of ambulatory, hospital and post-acute services.
Joining Northwell will give Nuvance Health access to the former’s clinical, operating and financial resources, which will combine purchasing power – which the systems said will help drive greater integration, in part by building on each organization’s research, education and clinical care infrastructure.
The systems said the agreement will also aid in efforts to attract and retain top talent, including physicians, nurses, and surgical and research specialists, as well as allied health and business professionals. By coming together, they said, medical staff and employees will have greater professional growth opportunities and new career prospects, which could include academic pathways for health professionals to acquire additional degrees and for new graduates to fill high-demand positions.
As nonprofit organizations, Northwell and Nuvance Health will also continue to provide care to anyone, regardless of their ability to pay, the organizations said.
Jeff Lagasse is editor of Healthcare Finance News.
Email: [email protected]
Healthcare Finance News is a HIMSS Media publication.
link