Northwell Health has completed its merger with financially distressed hospital system Nuvance Health, becoming the northeast region’s largest nonprofit health provider, it said Wednesday.
The New Hyde Park-based health system took over Nuvance’s seven hospitals, expanding its already vast inpatient network to 28 facilities throughout New York and Connecticut. The merger stretches Northwell’s outpatient footprint to 1,050 ambulatory care clinics and 73 urgent care facilities in the region, continuing a long-term strategy in the hospital system’s playbook to expand outside of the New York City region.
“Our overall strategy from day one was to continue growing and to be a regional health care provider,” Michael Dowling, CEO of Northwell Health, told Crain’s. “We want to be the premier player in the market.”
Northwell’s merger is the latest instance of hospital consolidation in New York, which has ramped up in recent years amid growing financial pressures on community hospitals. Though hospitals and some policymakers argue that consolidation is necessary to rescue cash-strapped facilities, health care payers and advocates say it is driving up costs. The state’s six largest health systems control more than 42% of all inpatient beds, resulting in significant increases in health care costs in recent years, according to a February report by the Community Service Society, a Midtown nonprofit that offers health and social services.
Dowling said that consolidation is “very beneficial,” adding that Northwell has expanded outpatient care in the communities where it has acquired hospitals and kept facilities open that may have otherwise shut down. The benefits of being a part of a large health system are especially apparent as the federal government pursues policies to cut public health research funding and Medicaid dollars, as well-resourced systems are more likely to withstand future cuts and have better negotiating power, he said.
“The federal government is creating a potential disaster,” Dowling said. “I would not want to be a smaller entity or a standalone entity today, especially if you are dependent on Medicare or Medicaid for the bulk of your revenue.”
Northwell finalized its merger with Nuvance just over a year after announcing its plan to take over the financially ailing health system. The providers signed an agreement to pursue the merger in February 2024, stating that it would allow them to pool their resources and invest in new technology and services in the Hudson Valley and Western Connecticut.
Since then, the health systems received approval from health regulators in New York and Connecticut, as well as both states’ attorneys general. Connecticut’s top health regulator, the Office of Health Strategy, raised concerns that the deal would raise prices for patients in the state, but Northwell reached an agreement with the agency stating that it would honor previous contracts with payers and invest $1 billion across all seven hospitals to improve health and safety, bolster programs including pediatrics and build outpatient care facilities, Dowling said.
Northwell now employs more than 104,000 employees, including 22,000 nurses and 13,500 doctors, the health system said. The merger brings Northwell’s annual operating revenue to nearly $23 billion, the health system said. The health system earned $18.6 billion in operating revenue last year, according to its most recent financial statement.
