Chattanooga, Tenn.-based Erlanger Health signed a non-binding letter of intent July 22 to join Greenville, S.C.-based Prisma Health, the two nonprofit systems announced.
The proposed partnership includes $2 billion in strategic capital investments to expand access to care and accelerate innovation and growth across the Chattanooga region. A final agreement requires approval from Erlanger’s board, the Erlanger Health Oversight Panel, the Hamilton County Commission, and federal and state regulators.
“More than 130 years ago, Erlanger was founded through an extraordinary gift that reflected a belief in our community and its potential, and today this investment assures our ability to meet our mission well into the future,” said Jim Coleman, president and CEO of Erlanger, a seven-hospital system. “By partnering with Prisma Health, we will be able to fast track our vision and keep Erlanger at the forefront of medicine.”
The proposed partnership follows an extensive evaluation process led by Erlanger’s board of directors.
“Healthcare is changing rapidly, and we knew that given our position of strength and national recognition for our clinical quality, we had a responsibility to explore options that would allow us to accelerate our plans forward,” Barry Large, chair of the Erlanger board of directors.
The move follows Erlanger’s March 2026 expansion of system-level leadership roles across clinical operations, finance and revenue cycle, and other functions as it aligned operations ahead of the deal.
The investment is designed to:
- Expand specialty and clinical capabilities
- Fund capital projects including the Erlanger East Hospital campus and Erlanger Baroness Hospital
- Protect the system’s Level I trauma center, Children’s Hospital, safety-net operations and transplant programs
- Strengthen graduate medical education and research; and
- Support physicians, nurses and employee recruitment and retention.
Under the proposal, Prisma Health will establish its East Tennessee regional headquarters in Chattanooga, which Mr. Coleman will lead as regional CEO. The Erlanger name will remain in use, and all employees and medical staff in good standing will be retained. Erlanger will hold the majority of seats on a newly created Prisma Health Eastern Tennessee board and gain representation on Prisma’s corporate board.
“Protecting and securing Erlanger’s mission, culture and legacy is a priority in our proposed partnership,” said Mark S. O’Halla, president and CEO of Prisma Health. “This partnership will help ensure Erlanger has the support and expertise necessary to build on its momentum and serve its communities at the highest level for decades to come.”
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