Healthcare Dealmakers—UnityPoint, Presbyterian's $11B merger called off; Olive AI's sell-off and more

Healthcare mergers and acquisitions are in no short supply as providers, health tech companies, retailers and other industry players look to expand their businesses and gain a competitive edge. Here’s a roundup of new deals that were revealed, closed, rumored or called off during the month of October.

Providers

UnityPoint Health and Presbyterian Healthcare Services called off plans for a cross-market merger. The entity would have spanned 48 hospitals with $11 billion in annual revenue. The systems did not share why they called off the deal, only noting to reporters that regulatory approvals didn’t play a role. However, the news came alongside word that UnityPoint President and CEO Clay Holderman would be leaving the organization.

Henry Ford Health came together with several of Ascension Michigan’s hospitals and other facilities to form a joint venture with over $10.5 billion in annual operating revenue. The deal is expected to close in summer 2024 and create an entity with about 50,000 employees, 13 acute care hospitals and over 550 sites of care under the Henry Ford Health branding. The organizations stressed that their pending deal is “neither a merger nor an acquisition” with no cash transaction taking place.

Aspirus Health and St. Luke’s Duluth took their merger plans a step forward with the signing of a definitive agreement. The tentative deal that was first announced back in July would yield a 19-hospital nonprofit. The agreement targets spring 2024 for a close, pending regulatory approvals, and outlines hundreds of millions of investments into St. Luke’s strategic projects. Minnesota Attorney General Keith Ellison said he is reviewing the deal.

Prospect Medical Holdings agreed to sell off the struggling four-hospital Crozer Health in order to fend off litigation from the Pennsylvania attorney general’s office and a local nonprofit. The private equity firm had acquired Crozer in 2016 and sought to close a failing hospital, which the groups said it was required to operate until at least 2026. Prospect said it hired Morgan Stanley to advise on a sale that it expects to move forward within 60 days.

UPMC (PDF) entered into a definitive integration and affiliation agreement with Washington Health Care Services. Per a notice, UPMC would appoint a third of the two-hospital system’s board once the deal is closed. The deal is still pending regulatory signoffs.

Mountain Health Network, Marshall Health, Marshall University and an 80-member multispecialty physician group came together in a four-hospital academic health system dubbed Marshall Health Network, based in West Virginia.

UC San Diego Health is purchasing Alvarado Hospital Medical Center from Prime Healthcare for $200 million. The organizations are aiming to close their deal before the end of the year.

Parkview Health picked up two Ohio hospitals and an outpatient center in an affiliation deal that closed in early October.

USA Health, the academic health system of the University of South Alabama, added the 349-bed Ascension Providence Hospital and its associated clinics. The system had purchased the facilities for $85 million.

Yale New Haven Health acquired PhysicianOne Urgent Care, which operates 27 locations across Connecticut, Rhode Island, Massachusetts and New York.

Payers

Blue Cross and Blue Shield of North Carolina will acquire 55 FastMed locations in North Carolina for an undisclosed sum. Blue Cross NC, which has been a minority investor in FastMed since 2012, said it plans to invest in the locations to build on patient experience and access to critical services. The pending deal is expected to close in early 2024 pending approvals.

Blue Cross Blue Shield of Vermont received an all-clear from its state’s regulators to become a subsidiary of Blue Cross Blue Shield of Michigan. The deal, unveiled back in May, is said to generate savings for the former company through shared contracts and vendors. The arrangement will also leave both organizations in charge of their respective governance, operations and policies.

Froedtert Health is buying out Ascension’s 50% stake in Network Health, a Wisconsin health plan jointly run by the nonprofit health systems. The plan offers commercial and Medicare health insurance plans across 23 of the state’s counties and currently serves more than 117,000 members. Financial terms and a target closing window were not disclosed.

Tech

IKS Health, a company that provides administrative, clinical, operational and revenue tech solutions, acquired AQuity Solutions for $200 million to broaden its services from ambulatory care providers to hospitals. The resulting entity will have annual revenues of more than $330 million and an expanded workforce of more than 14,000 employees serving over 150,000 clinicians in many of the largest hospitals, health systems and specialty groups in the U.S.

Olive AI, a healthcare automation unicorn, announced the sale of its remaining assets amid a shutdown of operations. Its clearinghouse and patient access business units were acquired by Waystar, while the prior authorization business unit has gone to Humata Health.

MDLIVE, the telehealth arm of healthcare payer Cigna’s Evernorth, is acquiring Bright.md for an undisclosed sum. The deal will help MDLIVE launch asynchronous options for virtual urgent care in the coming year.

Commure, which sells tech tools to health systems, unveiled a deal to merge with healthcare workflow automation software maker Athelas by the end of October. The combined company will have about 800 employees with plans to scale up thanks to a $70 million investment from General Catalyst that puts the combined entity at a reported valuation of $6 billion. Other financial terms of the deal were not disclosed.

Access Healthcare, a tech-enabled revenue cycle management and healthcare services firm, acquired patient engagement services company Envera Health to broaden its portfolio of capabilities. Terms were not disclosed.

WellSky, a software and services vendor, picked up post-acute care tech services firm Corridor from HealthEdge Investment Partners. The deal, for which financial details were not disclosed, will help WellSky expand its medical coding and revenue cycle management offerings.

Vizient acquired PrefTech OR, a preference card management software maker serving providers, for an undisclosed sum.

The American Health Information Management Association acquired HCPro, which offers educational and compliance-related revenue cycle management products and services, from its parent company Simplify Compliance. The nonprofit association will be operating HCPro as a for-profit, wholly owned subsidiary.