Not -for -profit Christianacare, Virtua Health Explore Merger

Diving brief:

• On Wednesday, non-profit organizations Christianacare and Virtua signed a letter of non-binding intention to explore a merger between northeast health systems.
• The non -profit combined regional system covered more than 600 healthcare sites and employ nearly 30,000 employees in 10 adjoining counties in New Jersey, Delaware, Pennsylvania and Maryland, according to a press release.
• If combined, annual income between the two systems could total more than $ 6 billion.

Diving insight:

Virtua and Christianacare will enter the process of reasonable diligence with the intention of signing final agreements and requesting regulatory approvals for the merger. Daily operations will remain unchanged during the negotiations and the two organizations will remain separate entities while they will explore a combination, said non -profit organizations.

“We have reached an important step. The two organizations report the desire to continue an in -depth and strategic exploration of what would be possible if we join two inheritances of excellence in health care,” said Edward Cloues, chairman of the board of directors of Virtua Health, in a statement. “Our administrators are encouraged by our initial assessments and conversations who suggest that we could collectively improve our capacities and strengthen our awareness of communities that depend on us.”

If it is merged, health systems say they would create better access to urgent, primary and behavioral health care, including a “proposed maternal risk program” to support more than 15,000 births per year, according to a press release.

New Jersey based Virtua The health portfolio consists of five hospitals, two independent emergency services and 42 ambulatory surgery centers. Christianacare, based in Delaware, has three hospitals and various ambulatory services in northern Delaware and the surrounding area.

The two non -profit systems have teaching relationships. Virtua is affiliated with Rowan University and associates with Penn Medicine and Children’s Hospital of Philadelphia for different specialties. Christianacare is a teaching system with more than 260 residents and scholarship holders.

The combined entity could have more than $ 6 billion in annual income. Virtua Health recorded $ 3.2 billion in revenues for the year ended on December 31, 2024, while Christianacare said operating income of $ 3.1 billion for the year ended June 30, 2024.

Credit agencies have evaluated both systems as “stable”. S&P Global in December said it expected Virtua to continue to generate “solid operational margins and cash flows”. In July, Moody’s evaluations said that Christianacare had a lot of liquidity and a solid brand on the state scale with solid demand for its clinical services.

The merger comes as providers are faced with significant policy changes. The newly produced Big Beau Bill Act includes more than $ 1 Billion in cuts to the Medicaid security program. Providers should record significant losses. By 2034, more than 100 rural hospitals are estimated at a high risk of closure.

In 2024, 21% of income from virtua patient services came from act and medication. More than 15% revenues from the Net patient service in Christianacare in his 2024 Financière came from Medicaid.

“Our vision of this new health system – when Medicare and Medicaid are faced with cuts and many hospitals have trouble staying open – gives me hope and excitement for our future and for the health of our neighbors,” said George Foutrakis, Chairman of the Board of Directors of Christianacare, in a press release.