Health Systems Will Seek More Cross-Market Mergers, But Many Will Fail

Last week, New Mexico-based Presbyterian Healthcare Services and Midwest-based UnityPoint Health signed a letter of intent to merge. One consultant thinks these kinds of announcements will continue in the coming years, but a significant chunk of these intended mergers will end up being called off due to health systems realizing they’re not ready to make the sacrifices needed to reap the benefits of a megamerger. Last week, New Mexico-based Presbyterian Healthcare Services and Midwest-based UnityPoint Health signed a letter of intent to merge. This is one of many cross-market mergers that health systems have explored in recent years, and one analyst - Sanjay Saxena, global leader of Boston Consulting Group’s healthcare division - thinks these kinds of announcements will continue in the coming years. But that doesn’t mean the deals will be sealed. A significant chunk of these intended mergers will end up being called off, Saxena said in an interview after UnityPoint and Presbyterian announced their plans.