Dive Brief:
The Connecticut Office of Health Strategy greenlit Northwell Health and Nuvance Health’s plans to merge this week. The agency was the last office required to sign off on the deal, the health systems told Healthcare Dive on Wednesday.
Nuvance and Northwell will form a 28-hospital system with more than 1,000 care sites across New York and Connecticut. The transaction will close in about a month, according to the Connecticut settlement agreement.
Nuvance’s declining financial health likely contributed to the decision to merge, according to attorneys general for New York and Connecticut, who previously reviewed the deal.
Dive Insight:
Nuvance and Northwell have billed the merger, which was first announced in February 2024, as symbiotic, saying it will accelerate innovation and help them attract and retain talent.
However, attorneys general for Connecticut and New York said Nuvance — which has six hospital campuses compared to Northwell’s 21 — has struggled financially since it formed in 2019 via a merger between Health Quest Systems and Western Connecticut Health Network.
The system had reported pressures related to underutilized medical services, as well as ongoing operational challenges in the wake of the COVID-19 pandemic.
Nuvance’s financial challenges led the attorneys general to approve the merger, saying possible closures outweighed the threats posed by healthcare consolidation.
In a filing to the Connecticut Office of Health Strategy this summer, the health systems reiterated Nuvance’s dire financial situation, stressing the need for an expedient merger. Nuvance said it lost over $220 million dollars during fiscal years 2022 and 2023, and warned ongoing difficulties must be addressed “as soon as possible.”
“In the event the Affiliation does not occur, Nuvance Health has considered its options … including a potential bankruptcy filing,” the health systems said. Meanwhile, Northwell said it has a history of helping health systems execute turnaround plans, and could help Nuvance achieve its strategic goals.
Still, both the Connecticut Office of Health Strategy and the state attorneys general put conditions on the merger.
The Connecticut Office will require Northwell to maintain all collective bargaining agreements currently in place and constrain growth in commercial prices. The system is also prohibited from engaging in any sale-leaseback transactions for at least five years.
Meanwhile, the attorney generals have stipulated that Northwell must expand women’s health services, including labor and delivery services at Nuvance’s Connecticut-based Sharon Hospital, and preserve staffing levels at New York-based Putnam Hospital.
Both regulatory bodies will monitor Northwell’s progress toward investing $1 billion into Nuvance over the next five years.
Nuvance is not alone in seeking financial stability through M&A. Mergers and acquisitions involving financially distressed health systems are on the rise, according to reports from consultancy Kaufman Hall. The organization first noted the trend last year and distressed deals dominated hospital M&A during the first quarter of 2025.
