Some of the largest health system mergers and acquisitions over the two years have been cross-market transactions, a trend that is anticipated to gather momentum despite the Federal Trade Commission taking a firmer stance on deals that could potentially violate antitrust laws.
"Cross-market" mergers are between health systems that operate in separate geographic areas and do not eliminate competition to attract patients since the systems provide services to distinct patient populations. However, these types of deals can lead to competitive effects when the merging systems have common payer and employer customers and are competing to be in the same payer and employer networks.
Cross-market deals spread combined organizations' operating risks across multiple markets while also expanding access to an academic medical center or widening the opportunity to experiment with innovative approaches because of more diverse markets resulting. With regulators increasingly clamping down on proposed transactions in similar geographic regions, cross-market deals are likely to be at the helm of future healthcare M&A.
Here are eight examples of cross-market health system mergers ranked by their estimated annual revenue, according to the Kaiser Family Foundation:
Editor's note: Operating revenues reflect all sources of income and come from audited financial statements covering the fiscal year prior to the merger announcement.
1. Kaiser Permanente (Oakland, Calif.) and Geisinger (Danville, Pa.)
Kaiser revenue: $95.4 billion
Geisinger revenue: $6.9 billion
Combined revenue: $102.3 billion
Year announced: 2023
Merger status: Pending review
2. Advocate Aurora Health (Milwaukee and Downers Grove, Ill.) and Atrium Health (Charlotte, N.C.)
Advocate Aurora revenue: $14.1 billion
Atrium revenue: $9 billion
Combined revenue: $23.1 billion
Year announced: 2022
Merger status: Complete
3. Spectrum Health (Southfield, Mich.) and Beaumont Health (Grand Rapids, Mich.)
Spectrum revenue: $8.3 billion
Beaumont revenue: $4.6 billion
Combined revenue: $12.9 billion
Year announced: 2021
Merger status: Complete
4. Intermountain Healthcare (Salt Lake City) and SCL Health (Broomfield, Colo.)
Intermountain revenue: $7.7 billion
SCL revenue: $2.9 billion
Combined revenue: $10.6 billion
Year announced: 2021
Merger status: Complete
5. Presbyterian Healthcare Services (Albuquerque, N.M.) and UnityPoint Health (West Des Moines, Iowa)
Presbyterian revenue: $5.5 billion
UnityPoint revenue: $4.3 billion
Combined revenue: $9.8 billion
Year announced: 2023
Merger status: Pending review
6. BJC Healthcare (St. Louis) and St. Luke's Health System (Kansas City, Mo.)
BJC revenue: $6.3 billion
St. Luke's revenue: $2.4 billion
Combined revenue: $8.7 billion
Year announced: 2023
Merger status: Pending review
7. University of Michigan Health (Ann Arbor) and Sparrow Health (Lansing, Mich.)
UM Health revenue: $5.6 billion
Sparrow revenue: $1.5 billion
Combined revenue: $7.1 billion
Year announced: 2022
Merger status: Complete
8. Marshfield (Wis.) Clinic Health System and Essentia Health (Duluth, Minn.)
Marshfield revenue: $2.8 billion
Essentia revenue: $2.6 billion
Combined revenue: $5.4 billion
Year announced: 2023
Merger status: Pending review