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Hospital operators in merger talks to form US industry leader: WSJ

[NEW YORK] Ascension Health and Providence St Joseph Health are in talks about a merger between the two Catholic non-profits that would create the largest US hospital chain, the Wall Street Journal reported on Sunday, citing people familiar with the discussions.

A deal between St Louis-based Ascension and Renton, Washington-based Providence would give the combined entity 191 hospitals in 27 states and annual revenue of US$44.8 billion, the Journal reported. That would surpass the current largest US hospital operator, HCA Healthcare Inc, a for-profit company.

Providence declined to comment on the report. Ascension did not respond to a request for comment.

The two have been in talks about a deal for months but have not reached an agreement, the Journal reported. The paper said that unlike for-profit companies, mergers of nonprofit hospital operators do not typically involve one entity buying the other.

The merger talks come at a pivotal time in the industry, as a series of deals, major changes to the 2010 Affordable Care Act, dubbed Obamacare, and rising drug prices have reshaped the US healthcare landscape.

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Last week, Catholic Health Initiatives and Dignity Health announced that they had signed a definitive agreement to align their organisations. The merger would result in the formation of a large and diverse Catholic health system.

On Dec 3, CVS Health Corp and Aetna Inc proposed a US$69 billion merger, arguing it would enable the companies to tackle soaring healthcare spending by offering lower-cost medical services in pharmacies.

That deal, the year's largest, would combine one of the nation's biggest pharmacy benefits managers and pharmacy operators with one of its oldest health insurers.


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