NEW HYDE PARK, N.Y. — Nuvance Health will combine with Northwell Health, the largest health provider in New York state, to form a 28-hospital system that spans the New York-Connecticut border, the two organizations announced Wednesday, Feb. 28.
Before the agreement is finalized, it must be approved by New York, Connecticut and the Federal Trade Commission.
Nuvance Health, based in Danbury, Connecticut, operates seven hospitals in western Connecticut and Dutchess County, including Sharon Hospital and Northern Dutchess Hospital in Rhinebeck, while Northwell, based in New Hyde Park, operates 21 hospitals and nearly 900 outpatient facilities. According to Northwell, its 85,000 employees also make the system the largest private employer in New York state.
“This partnership opens a new and exciting chapter for Northwell and Nuvance and provides an incredible opportunity to enhance both health systems and take patient care and services to an even higher level,” said Michael Dowling, president and CEO of Northwell Health, in a statement.
Nuvance Health, has been struggling financially. At Sharon Hospital, which loses some $20 million annually, Nuvance hoped to cut losses by closing the maternity ward, which it said loses $3 million a year. Its application to close the unit was denied by Connecticut in February.
Sharon Hospital’s losses are not unique in the Nuvance network. Nuvance as a whole, apart from a $6 million net gain in 2021, has been operating at annual net losses of eight and nine figures since its formation in 2019.
Last summer, its outstanding debt was downgraded again by S&P and by Moody’s; Moody’s noted that Nuvance’s “next several quarters” would be “pivotal.” For its fiscal year ending Sept. 30, 2023, Nuvance posted a net loss of $121.5 million.
In a statement, Dr. John M. Murphy, president and CEO of Nuvance Health, said that “By joining forces with Northwell Health, we are taking a giant leap forward in our shared mission to enhance the quality, accessibility and equity of the health care we provide to our communities.”
In their joint announcement, the two companies stated that “Northwell will make significant investments in Nuvance Health,” and that the “integration” would create more, and better, health care jobs.
Asked what this means in Sharon, Sharon Hospital CEO Christina McCulloch noted that “the details of what will happen, if all gets approved” and the Nuvance system becomes part of Northwell Health, “are yet to be determined.” But, she said, “Northwell has agreed to invest in all of the [Nuvance] hospitals if this does come to be” and if the deal gets approved, the agreement will strengthen SH’s ability to provide care.”
“The news of Nuvance’s merger into Northwell Health comes at a time of general consolidation of healthcare systems across our state,” observed state Rep. Maria Horn (D-64).
“I understand the financial challenges Nuvance has been facing,” said Senate Republican Leader Stephen Harding, whose district includes New Milford and Sharon. He continued: “I am encouraged to hear that ‘patient-facing’ jobs are not in jeopardy. I am also encouraged to hear that key investments will be made and that health care access will be increase.”
Harding added: “however, like many, I have significant concerns for myself and my fellow neighbors in the 30th Senate District. Ensuring that existing medical services in our local hospitals remain fully open and operational, particularly Sharon Hospital’s Labor and Delivery Unit, is of the utmost importance to me, and I hope it remains of utmost importance to Connecticut’s Office of Health Strategy as they review this merger.”
McCulloch noted that the arrangement between Nuvance and Northwell is not legally considered a merger or an acquisition but an “agreement.”
Also noting Nuvance’s financial difficulties, District 19 Dutchess County Legislator Chris Drago said he hoped that this deal would end Nuvance’s attempts to cut services at Sharon Hospital. He also said that he hopes that it will improve the hospital’s ability to attract and retain staff and medical talent to better serve the community.
“I do worry that typically consolidation drives cost up and quality down,” he said. “I’m cautiously optimistic.”
Horn shared: “In my conversations with Sharon Hospital leadership, it has been suggested that the significant resources of the new system will lead to increased support for Sharon Hospital and the community it serves. I look forward to learning about the system’s strategic commitment to Sharon Hospital specifically, and look forward to a public process at which these questions can be addressed.”
Nuvance and Northwell describe an “integrated healthcare system.” The organizations say that the deal will grant “local communities” access to “coordinated care across western Connecticut, the Hudson Valley, New York City and Long Island.” They also promise that both Northwell and Nuvance will “continue to provide care to anyone, regardless of their ability to pay.”
The terms of the deal, which is still subject to state and federal approval, are not clear for Sharon Hospital, said McCulloch.
Amy Forni, a spokeperson for Nuvance Health, said that Nuvance expects to be filing for approval for the agreement in the coming months.
McCulloch noted that the regulatory and approval process could, Nuvance estimates, take a year or more.
Sharon Hospital timeline
1909 — Sharon Hospital is founded in a rented house by Dr. Jerome Chaffee.
1916 — A new building opens with 16 beds and three nurses.
1947 — Dr. Chaffee dies.
2002 — The nonprofit hospital is purchased by Essent Healthcare of Tennessee, becoming the first for-profit hospital in the state. A group called Save the Hospital was formed to protest the sale.
2011 — Essent Healthcare merges with RegionalCare Hospital Partners, also based in Tennessee.
2016 — Health Quest takes over Sharon Hospital from Essent and it becomes a nonprofit again.Health Quest was formed from the merger of three hospitals: Vassar Brothers in Poughkeepsie; Northern Dutchess Hospital in Rhinebeck; and Putnam Hospital Center in Carmel.
2019 — Health Quest merges with Western CT Health Network, with hospitals in Danbury, Norwalk and New Milford, to become Nuvance Health.
2024 — Nuvance Health announced plan to join nonprofit hospital system Northwell Health.
