Ascension Health will put off talks about a possible merger with another major hospital system as it restructures its business, according to people familiar with the discussions.
The Edmundson-based nonprofit health care system plans to transition from a hospital-oriented business to one more focused on outpatient care. This will indefinitely pause Ascension’s merger talks with Providence St. Joseph Health, a major nonprofit hospital system based in Renton, Washington. Those talks were first reported in December.
The Ascension-Providence deal would have created the largest chain of U.S. hospitals. Ascension currently operates 153 hospitals in 22 states and the District of Columbia.
Ascension’s directors unanimously endorsed the new direction as it faces dwindling reimbursements from payers and rising drug costs. The move also comes at a time when more medical care moves outside of hospitals, putting pressure on Ascension’s core operations.