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Merger plans dropped: UnityPoint Health, Presbyterian Healthcare Services go separate ways

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The systems issued a joint statement saying the deal won’t move forward. UnityPoint also announced the departure of its CEO.

Apparently, UnityPoint Health won't unite with Presbyterian Healthcare Services after all.

UnityPoint Health and Presbyterian Healthcare Services say they have dropped their plans to merge and form a large hospital system. (Photo: UnityPoint Health)

UnityPoint Health and Presbyterian Healthcare Services say they have dropped their plans to merge and form a large hospital system. (Photo: UnityPoint Health)

The two health systems issued a statement Wednesday saying that they were dropping their merger plans.

Presbyterian and UnityPoint announced in March that they were considering a deal to form a combined system that would operate more than 40 hospitals. If the merger came to fruition, it would have created a system with $11 billion in revenue, the Albuquerque Journal reports.

Now, the deal isn’t going forward, and UnityPoint announced the departure of CEO Clay Holderman. UnityPoint officials say Holderman has left UnityPoint "to explore other professional opportunities,” the Des Moines Register reports.

The larger UnityPoint, based in Des Moines, operates 32 hospitals in Iowa and parts of Illinois and Wisconsin. Presbyterian, based in New Mexico, operates nine hospitals.

In their joint statement, the systems said, “After significant planning and consideration, the two organizations will no longer be pursuing the transaction.”

The two systems didn’t elaborate on why the merger isn’t happening.

Dale Maxwell, CEO of Presbyterian Healthcare Services, says the system will continue to weigh steps to ensure the system’s long-term future.

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

Sally Gray, chairwoman of UnityPoint Health’s board of directors, said that the merger wasn’t the right move for the system.

“We believe this decision allows us to better meet the needs of our patients, team members, communities, and key stakeholders,” Gray said in the statement. “As we move forward, UnityPoint Health is focused on identifying new, innovative ways to deliver low-cost, high-quality care to those we serve.”

Scott Kizer has been named the new president and CEO of UnityPoint. He previously served as UnityPoint’s chief legal officer from 2021-23. Previously, Kizer served as senior vice president and chief legal officer at BayCare Health System in Florida.

Gray said in a statement, “We’re confident in Scott’s leadership going forward, and we remain committed to showing our people, patients and communities how much they matter.”

In announcing the merger exploration in March, Holderman spoke enthusiastically about the potential of a deal with Presbyterian.

“By lowering administrative costs, building new capabilities and increasing investments in innovation and clinical excellence, our intent is to help improve affordability and accessibility of care. We’re excited about the unique possibilities ahead,” Holderman said in a March statement.

Analysts noted that the deal, involving two systems in different regions of the country, would avoid regulatory concerns about a merger involving systems in the same area. The Federal Trade Commission has taken a closer look at healthcare deals, particularly involving systems in the same area, and FTC objections have led some hospitals to drop merger plans.

UnityPoint Health previously explored a merger with Sanford Health in 2019, but the two systems abandoned those plans.

Even with UnityPoint and Presbyterian dropping their plans, the hospital industry has seen more mergers announced in 2023. Analysts expect to see more healthcare deals in the coming months as health systems look for strategic opportunities, or some struggling hospitals look for bigger partners to ensure they can stay in business.

Read more: As Wisconsin hospital systems near merger, they say health equity is a top priority


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