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WSJ: Ascension, Providence St. Joseph halt merger negotiations

St. Louis-based Ascension and Renton, Wash.-based Providence St. Joseph Health reportedly shelved negotiations regarding a proposed merger, sources familiar with the matter told The Wall Street Journal.

Sources told the publication the transition of medical care outside the hospital setting has put pressure on the healthcare giants to restructure their operations. A complex merger would split the organizations' attention between restructuring and negotiating a potential combination, the sources said.

One of the sources told the WSJ Providence St. Joseph is focused on improving its financial performance and increasing its investment in digital, retail and ambulatory healthcare. Another source said Ascension's goals include boosting growth and labor productivity, making the timing of the merger less than ideal.

Should merger talks resume, they will not occur soon, the sources said.

The WSJ first reported the organizations' plans to merge last December. Had the planned merger been successful, the combined Ascension-Providence St. Joseph entity would have comprised an estimated 191 hospitals across 27 states and maintained annual revenues of $45.8 billion, according to the health systems' recent financial statements obtained by the WSJ.

The merged entity also would have displaced Nashville, Tenn.-based HCA Healthcare as the largest hospital operator in the nation.

The failed negotiations come on the heels of a wave of hospital consolidation across the industry as health systems seek to combat the shift in how and where patients receive care. Englewood, Colo.-based Catholic Health Initiatives and San Francisco-based Dignity Health announced plans to merge in December 2017, while Downers Grove, Ill.-based Advocate Health Care and Milwaukee-based Aurora Health Care received the final approval necessary to complete their merger earlier this month.

Ascension also announced its intent to sell one of its Connecticut hospitals to Hartford (Conn.) HealthCare March 27.

Providence St. Joseph Health declined to comment to Becker's Hospital Review about the failed negotiations.

To access The Wall Street Journal report, click here.

Editor's note: Becker's Hospital Review reached out to Ascension for comment and will update the article as more information becomes available.

More articles on transactions and valuations:
CHS to sell 3 Tennessee hospitals
Jefferson, Einstein Healthcare Network to explore merger
Vatican approves Cabell Huntington's acquisition of St. Mary's

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