Northwell and Nuvance Health Merger Clears Final Regulatory Hurdle

Northwell Health and Nuvance Health have secured the last regulatory approval needed for their 28-hospital merger, paving the way for the creation of an $18 billion integrated nonprofit healthcare system. The Connecticut Office of Health Strategy gave its final sign-off on Tuesday, following earlier approvals from New York regulators and both states' attorneys general.

Merger Details and Financial Commitments

The merger, first announced 14 months ago, is expected to close within the next 30 days. As part of the agreement, Northwell Health, the acquiring entity, has committed to investing at least $1 billion into Nuvance's Connecticut and New York hospitals over an unspecified period. The deal will result in a combined network of more than 1,000 care sites across New York and western Connecticut, employing nearly 100,000 staff and 14,500 providers.

Northwell has agreed to several conditions as part of the regulatory approval, including:

• Implementing price constraints tied to state and regional cost growth benchmarks
• Refraining from real estate sale leasebacks for five years
• Maintaining all inpatient services and collective bargaining agreements
• Developing plans to improve care through physician recruitment and resource allocation
• Promoting alternative payment models

Impact on Healthcare Services

The merger aims to strengthen healthcare delivery in the region, with a particular focus on maintaining and enhancing services in Connecticut. Deidre Gifford, M.D., commissioner of Connecticut's Office of Health Strategy, stated, "Northwell Health will strengthen the capacity of these hospitals to provide accessible, affordable, high-quality care in the diverse urban, suburban and rural communities they serve."

Key service commitments include:

• Preserving prenatal and postpartum care services in western Connecticut, including at Nuvance's Sharon Hospital, for at least five years post-merger
• Implementing Northwell's "more generous" financial assistance policies at Nuvance hospitals
• Expanding access to care and enhancing services across the combined network

Financial Outlook and Leadership Statements

The merger comes at a crucial time for Nuvance Health, which has reported multiple consecutive years of losses, including a $98 million operating deficit for the fiscal year ended September 30, 2024. In contrast, Northwell Health logged a $198 million operating gain in 2023 and was on track for a $227 million operating gain in the first nine months of 2024.

Michael Dowling, Northwell's President and CEO, expressed optimism about the merger's potential: "This partnership opens a new and exciting chapter for Northwell and Nuvance Health and provides an incredible opportunity to enhance both health systems and take patient care and services to an even higher level."

Dr. John M. Murphy, Nuvance's president and CEO, added, "By joining forces with Northwell Health, we can strengthen and enhance our ability to meet the needs of patients across Connecticut and the Hudson Valley for generations to come."