State AGs greenlight Northwell, Nuvance merger

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.

Photo courtesy of Northwell Health

Attorneys general from Connecticut and New York have given their blessing to a 28-hospital merger proposed by Northwell Health and Nuvance Health that would establish a roughly $18 billion integrated health system.

The two organizations contend that their combined strengths will help to 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.

According to a statement from the office of Connecticut AG William Tong, Northwell and Nuvance have agreed to preserve labor and delivery services at Sharon Hospital and to strengthen access to local healthcare in Western Connecticut, resolving the antitrust investigation into the proposed affiliation between the two hospital systems.

As a condition of approval, Northwell agreed to several enforceable conditions for five years to maintain competition and affordable access in the healthcare market.

For one, the health system said it would commit financial and operational resources towards the installation of a unified electronic medical records system, including the related IT and cybersecurity expertise required for improvements to Nuvance's IT infrastructure, as well as enhancement of data security.

Another condition: Negotiating rates for reimbursement of services independently for Connecticut and New York facilities, and to otherwise comply with the terms of Connecticut's new statute prohibiting all-or-nothing, anti-steering, anti-tiering clauses in network agreements between payers or plan sponsors and providers. The purpose of this statute, said Tong, is to enable employers, insurers and other payers to keep costs from skyrocketing as healthcare systems consolidate.

WHAT'S THE IMPACT?

Northwell and Nuvance 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 would give Nuvance Health access to the former's clinical, operating and financial resources, which would combine purchasing power – which the systems said would help to drive greater integration, in part by building on each organization's research, education and clinical care infrastructure.

The systems said the agreement would 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 would 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 would also continue to provide care to anyone, regardless of their ability to pay, the organizations said.

THE LARGER TREND

Northwell Health recently completed construction of a $560 million, 288,000-square-foot surgical tower at North Shore University Hospital. It called the tower "one of the most significant projects of its kind" in the New York Metro area. About 40% of all patients at NSUH come from Queens, while another 5% travel more than 100 miles to seek care there, the health system said.

NSUH, which has 756 licensed beds and treats more than 90,000 patients each year, is home to the Sandra Atlas Bass Heart Hospital (SABHH), the Katz Women's Hospital, neurosurgery, multi-organ transplant services and a busy emergency department. NSUH is a Magnet-recognized hospital by the American Nurses Credentialing Center, which spotlights excellence in nursing.

In 2023, the Centers for Medicare and Medicaid Services gave the hospital its highest 5-star rating, while U.S. News & World Report named the hospital No. 1 in New York State and in the top 22 nationally.

Last fall, Northwell said it was investing $350 million over the next five years and launching a $150 million fundraising campaign to expand pediatric behavioral health services across its footprint. The plan includes a $350 million investment from Northwell toward capital, programs, services and operating costs, as well as a goal to fundraise $150 million through philanthropy.

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.