Intermountain Healthcare’s merger with SCL Health will have long-term benefits for Utahns, leaders say

The merger brings eight additional hospitals and 160 new clinics under the Intermountain umbrella, making it the 11th largest nonprofit health system in the United States.

(Jud Burkett | Special to the Tribune) The sun sets over Intermountain Healthcare's St. George Regional Hospital Wednesday, Oct. 6, 2021.

After years of matchmaking and negotiating, Intermountain Healthcare has completed its merger with SCL Health, expanding the nonprofit’s reach across the country and bringing eight additional hospitals and 160 new clinics under the Intermountain name. The combined organization now represents the 11th largest nonprofit health system in the U.S., according to a news release.

Organizational leaders say the change is about sustainability and will improve Utah’s largest hospital system’s capacity to produce value for its patients — both new and current. Intermountain has been in merger talks with other health systems for years, first with Dakota-based Sanford Health in 2020 (the proposed merger fell through later that same year) and then with SCL Health. The organizations first announced their plans to merge last September, and the final merger officially happened on April 1.

“They wanted to join us because of our focus on innovation, on doing things like digital transformation and telehealth, [our] support for rural communities, the way we’ve continued to change the way we deliver care so that it’s lower and lower cost and more accessible and closer to home for people,” Dr. Marc Harrison, Intermountain’s CEO, told The Salt Lake Tribune.

Trained as a pediatric intensive care doctor, he says he wants to see the Intermountain way propagated across the country, a model he describes as delivering care that is “demonstrably high quality, demonstrably low cost, demonstrably innovative, demonstrably humane.”

Harrison believes Intermountain has solutions for many of the country’s health care woes; it is one of the reasons he has pursued partnerships with out-of-market organizations for so long. The merger will allow Intermountain to serve communities in four new states: Colorado, Montana, Wyoming and Kansas, adding to its list of facilities in Utah, Idaho and Nevada.

It will also give the doctor the opportunity to test his hypothesis about what health care should look like across the United States.

“Here in Utah, we are very fortunate to live in a healthy state, with good health care that is, relatively speaking, affordable,” he said. “Not many people in the country can say that. And the more we can learn to further that, and the more we can drive that movement across the United States, I think the better it is for Americans.”

In some ways, his faith in the Utah-based system ties back to the genesis of the organization nearly a half-century ago.

Intermountain’s directive

When Intermountain Healthcare started in 1975, it had one directive: become a model system that others could emulate, said Michael Leavitt, former Utah governor and new chairman of Intermountain’s Board of Trustees. He sees the merger as a sign that Intermountain has accomplished that goal.

“I feel confident in saying if you ask 100 knowledgeable people who they thought the top five [health] systems in the country were, 90% of them would list Intermountain in their top five,” he told the Tribune.

“It was not conceived to be just a Utah system, Leavitt said of Intermountain, explaining the mission of expansion shared by Harrison. “I think it’s designed to recognize that there’s an interior West here that is integrated economically and culturally. ... What will happen here is that the quality of care in that entire region will improve, not just because Intermountain’s there, but because they hold a new standard.”

The merger will also increase Intermountain’s sustainability, the new chairman said, allowing it to continue to pursue institutional goals as a nonprofit that can’t enter capital markets to obtain funding.

When the merger was announced in September, Harrison estimated the combined systems would generate around $14 billion in annual revenue.

Historically, health care mergers have done little to help patients’ pocketbooks, according to a study from the Center for American Progress. In-market consolidation often results in decreased competition, which leads to higher prices. However, since Intermountain’s merger is a cross-state expansion of care, rather than a consolidation of market share in one geographic location, Harrison said it will not lessen competition.

It remains to be seen how the merger will affect costs for patients, and in what way.

Leavitt, who also served as the secretary of the U.S. Department of Health and Human Services under the George W. Bush administration, said there is an ongoing movement in health care away from fee-for-service medicine and toward value-based care, which emphasizes better outcomes and lower costs.

Will Utahns see a change in health care?

For all the benefits Harrison foresees stemming from the merger, he doesn’t think Utahns will notice any large changes – at least not right away.

The integration process is expected to take two years, during which time the organizations’ ancillary teams, such as the human resources and finance departments, will combine. Leaders from both organizations have already filled into management roles, including on the new Board of Trustees, and Harrison expects a healthy cross-pollination of people and ideas.

Harrison, who expects many of Intermountain’s operations to remain the same, will continue to serve as president and CEO, while Leavitt has taken over as chair of the integrated board.

Harrison expects the integrated system to continue investing in digital and telehealth services, increasing the accessibility of care while also working with the federal government to lower costs. He also said he is excited for Intermountain entities to learn from their new partners, specifically mentioning how SCL Health ran their ambulatory surgery centers and the way they interacted with rural communities.

“They’re a very capable group,” he added. “And this is not a one-way deal, in that they’re only joining us because we know things that they don’t, but we’re really excited to have them join us because they’re very good at some things that are going to advantage Utahns.”

He reiterated that he doesn’t expect Intermountain to cut any of its now 59,000 employees, who work at its 33 combined hospitals and 385 clinics.

SCL Health is a Catholic-affiliated system and oversaw a mix of secular and faith-based entities, Harrison said, the latter of which operated under religious directives that prohibited them from providing contraceptives, performing surgeries intended to prevent or end a pregnancy, or conducting in vitro fertilization. Those entities will remain Catholic, in name and practice. However, all original Intermountain facilities will continue as secular units.

“Intermountain has just embraced us continuing to maintain our Catholicity,” said SCL Health CEO Lydia Jumonville, in September. “We will follow all of the Catholic directives and [Ethical and Religious Directives], and all of the values of the Catholic hospitals will be there.”

Intermountain Healthcare has religious roots as well and started as a 15-hospital system that was donated by The Church of Jesus Christ of Latter-day Saints to the communities they served. Intermountain administrates the nonprofit while its Board of Trustees represents the community’s interests.

Harrison asked that the public oversee the growth of the community asset in the coming years as well.

“Our neighbors here in Utah, please watch us carefully for continued focus on improving our communities,” he said.

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