SCL Health, Intermountain Healthcare complete merger in latest hospital consolidation shift | Health

Broomfield-based SCL Health, which operates five hospitals in Colorado, announced Tuesday that it had completed its merger with Intermountain Healthcare, a larger, Utah-based nonprofit system.

The deal was announced in September, pending approval by state regulators. With that approval secured last week, the merger means Intermountain Healthcare now operates 33 hospitals and 385 clinics, employing more than 59,000 caregivers, across seven states, according to an SCL Health news release. SCL operates four Front Range hospitals, plus St. Mary’s in Grand Junction, with three more hospitals and a rehab facility in Montana and smaller clinics in Kansas.

SCL will now be folded into Intermountain, which previously acquired HealthCare Partners Nevada and Saltzer Health, two physicians groups, plus an air ambulance company, according to Fierce Healthcare. With SCL Health now in its stable, Intermountain holds “$16.2 billion in cash and investments, $16.8 billion in net assets, $14.2 billion annual revenue (and) 436 days cash on hand,” Fierce Healthcare reported in January. SCL’s hospitals in Colorado posted a combined 7.1% profit margin in 2019 and 6% in 2020, according to a recent state report.

As part of the merger, SCL and Intermountain “agreed there will be no material layoffs or downsizing, and there is no intention to move, close, or consolidate facilities because of the merger,” the Colorado Department of Law wrote last week, when it formally cleared the deal to move forward.

The merger is the latest sign of the consolidation shift within American health care, which has increasingly moved toward larger systems and fewer independent hospitals and, increasingly, fewer independent providers. A presentation by the Colorado Department of Health Care Policy and Financing last week indicated that 46 of the state’s 84 hospitals are now part of a larger system, up from 26 in 2009.

According to the Kaiser Family Foundation, a leading national health care think tank, hospital consolidation has been shown to lead to “higher health care prices for private insurance.” Despite the increase in consolidation in recent years and the corresponding increase in prices, Kaiser found “no clear evidence that consolidation improves health care.”

At that presentation, the department’s executive director, Kim Bimestefer, referred to that trend, and she described SCL being “gobbled up” by Intermountain. She noted that roughly $50 million leaves St. Mary’s in Grand Junction each year to SCL Health’s “home office” in Broomfield. Now, she said, that money will move farther from home.

In a news release last week, the Colorado Department of Law wrote that the merger “will not materially change” SCL’s “charitable purpose” and that “Colorado assets will not be transferred out of state as part of the transaction.”

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