Intermountain and SCL Health sign letter of intent to merge

Utah-based Intermountain Healthcare and Colorado-based SCL Health — two nonprofit health care organizations — signed a letter of intent to merge on Thursday. The letter promises higher quality care, greater accessibility for underserved communities, and greater affordability. 

 

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The combined health system will include 33 hospitals, 385 clinics, and more than 58,000 health care workers covering Utah, Nevada, Idaho, Colorado, Montana, and Kansas. 

The new health system will continue under the Intermountain moniker and be headquartered in Salt Lake City. SCL’s Broomfield, Colorado office will become a regional office for the system. 

Current Intermountain president and CEO Marc Harrison will act as the president and CEO of the merged Intermountain, while SCL president and CEO Lydia Jumonville will hold her role for a two-year integration period and be on the system’s new combined board.

Harrison said:

“This is a great day for our organizations, our caregivers, and the people in the communities we serve. We also believe it is a great day for health care in the United States, as it promotes and advances the cause of affordable, high quality, and accessible care delivered in a value-based model.”

Both health systems said they are committed to rural health care and have “avoided the rural health care deserts [seen] across the United States.” Harrison said the new system will become a model of rural health care for the entire country. 

Jumonville said:

“This merger will really enable us to create a health care organization that is poised to meet the challenging and changing needs of the health care landscape. We are going to be focusing on increasing population health efforts, enhancing opportunities for innovative approaches to care delivery, and — as Mark said — we really want to keep care close to home whenever possible, especially for rural, underserved, and vulnerable populations.”

Jumonville said each system is “pursuing this merger from positions of strength” and not out of necessity. The two CEOs said this merger is not to make more money, but to provide higher quality and more accessible and affordable care to their communities. Harrison said:

“This is the opposite of those mergers where people come together and try to exert leverage over commercial insurance to get more money. What we’d really love in the long run is for some of those payers to engage with us in risk-based contracts where we can really work hard at keeping people well.”

A recent executive order from President Biden made federal hospital merger reviews stricter so mergers cannot lead to higher prices for employers and consumers. Biden specifically called out mergers that “left many areas, especially rural communities, without good options for convenient and affordable health care service.” Biden said:

“Thanks to unchecked mergers, the 10 largest systems now control a quarter of the market.”

Harrison said this merger was unlikely to be in conflict with Biden’s executive order since the systems do not overlap geographically and they’ve consistently promised to maintain price transparency and cost reduction. 

“In many ways, I believe we represent the model merger … We’re trying to move toward value, which has been one of the hallmarks of the Biden administration. So, we’ll see what the regulators say, but we’re very straightforward folks with straightforward organizations. We believe our track records are good and that we do not ping any of the traditional concerns around mergers historically.”

State of Reform reached out to the Utah Hospital Association and the Northern Utah Economic Alliance, who were unavailable for comment.