Intermountain, SCL Health complete merger, creating 33-hospital system

Photo courtesy of Intermountain Health Care

Intermountain Healthcare, headquartered in Salt Lake City, and Colorado-based SCL Health, have finalized their merger after getting official approval from the Colorado attorney general's office.

The AG's office issued an opinion allowing the merger to proceed.

SCL Health and Intermountain will combine their respective health systems into a new unified health system, and Intermountain will become the ultimate parent entity. SCL Health and all its subsidiaries, including all the Colorado hospitals, will be included in the consolidated system.

The combined nonprofit health system will adopt the moniker of Intermountain Healthcare, and will encompass 33 hospitals and 385 clinics spread across six states, with roughly 58,000 employees.

The Colorado Department of Law assessed the proposed merger through the lens of the Colorado Hospital Transfer Act. Because both hospital systems are nonprofit systems, the department's review was limited by law to ensuring the merger would not result in a substantial change to the charitable purposes of SCL Health and its Colorado hospitals, and there would not be a significant amount of hospital assets that leave the state in the transaction.

Under the Act, if both conditions are met, the transaction must proceed. Based on documents and other information produced by SCL Health and Intermountain, the department determined the merger met both conditions.

The department also found no reason to believe there will be a reduction in the availability and accessibility of healthcare services in the communities served by the hospital.

Plans for the merger were first announced in September 2021.

WHAT'S THE IMPACT?

SCL Health is headquartered in Broomfield and operates four hospitals in Colorado, including Lutheran Medical Center in Wheat Ridge, Good Samaritan Medical Center in Lafayette, Saint Joseph Hospital in Denver, and St. Mary's Hospital and Medical Center in Grand Junction. SCL Health also operates hospitals in Montana. The Intermountain Healthcare system includes 24 hospitals, primarily in Utah, Idaho and Nevada.

While there will be changes to the corporate governance of SCL Health post-merger, the Colorado hospitals will effectively operate the same as they had pre-merger, with no major change to their charitable purposes, the systems said. 

All Colorado hospitals will continue to serve their existing communities and keep their hospital assets in Colorado, and the Community Boards for the Colorado hospitals will retain primary oversight of their respective facilities and operations.

In addition, SCL Health and Intermountain agreed there will be no material layoffs or downsizing, and there is no intention to move, close or consolidate clinical facilities due to the merger.

THE LARGER TREND

In 2021, the Biden administration sought to crack down on hospital consolidation with an executive order that encouraged the Department of Justice and the Federal Trade Commission to enforce antitrust laws and review and revise their merger guidelines to ensure patients are not harmed by such mergers.

Mergers have left many areas, especially rural communities, without good options for convenient and affordable healthcare service, according to the order.

Hospital advocacy groups, including the Federation of American Hospitals and the American Hospital Association, pushed back on Biden's executive order, saying integration and scale can be beneficial in responding to community needs, particularly during a pandemic.

Last year, the FTC began an investigation to look into how past mergers impacted competition with hopes to use its findings to revamp its merger retrospective program.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com