The nonprofits are pursuing consolidation with the aim of expanding access, scaling innovation, and strengthening financial resilience.
ChristianaCare and Virtua Health are exploring a potential merger that could create a nonprofit health system spanning four states and more than 600 care locations.
The two organizations signed a non-binding letter of intent to co-found a new regional system with more than $6 billion in combined annual revenue and nearly 30,000 employees.
The proposed partnership would join Delaware-based ChristianaCare, an academic health system consisting of three hospitals and a wide network of primary care and outpatient services, with New Jersey’s Virtua Health, which includes five hospitals, two freestanding emergency departments, and 42 ambulatory surgery centers. If finalized, the merger could span 10 contiguous counties across New Jersey, Delaware, Pennsylvania, and Maryland.
“We are excited to take this bold step to double down on our mission, multiply our excellence and ensure our legacy of high-quality care in our local communities for generations to come,” Janice Nevin, president and CEO of ChristianaCare, said in the announcement.
Neither health system appears to be pursuing a merger due to financial distress. In its most recent earnings report, ChristianaCare posted $3.1 billion in total operating revenues for the year ended June 30, 2024.
Virtua Health also reported robust earnings, recording $3.2 billion in revenue for the year ended Dec. 31, 2024.
The unified system would prioritize urgent and primary care access, behavioral health, and a proposed maternal risk management program covering 15,000 births annually, according to the news release.
“We see this as a unique opportunity to shape the future of care in this region with innovation and intention,” Dennis Pullin, Virtua Health’s president and CEO, said in a statement. “Together, we aim to create an integrated regional health system built on human connection, clinical excellence and a deep commitment to all people in the communities we serve.”
The potential merger between Virtua Health and ChristianaCare could better position the combined system to navigate growing uncertainty around Medicaid policy and reimbursement.
Both organizations draw a substantial portion of their net patient revenue from public payers, especially Medicaid, and scaling up could provide the operational cushion and negotiating power needed to withstand future funding cuts. In 2024, ChristianaCare brought in an estimated $400 million in net patient revenue from Medicaid, accounting for roughly 16% of its total.
Virtua Health, meanwhile, derived approximately $672 million from Medicare and Medicaid combined, making up 21% of its total patient service revenue. That financial exposure makes the policy environment a critical factor in strategic planning for both systems.
“Our vision for this new health system – when Medicare and Medicaid are facing cuts and many hospitals are struggling to stay open – gives me hope and excitement for our future and for the health of our neighbors,” George Foutrakis, chair of the ChristianaCare’s board of directors, said in a statement.
The organizations will begin due diligence and work toward final agreements and regulatory approval, with patient care and day-to-day operations continuing as usual in the meantime.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
The proposed merger by ChristianaCare and Virtua Health would include a system with more than 600 care sites, nearly 30,000 employees, and span 10 counties.
Both organizations remain financially strong, with over $6 billion in combined revenue for 2024.
The merger positions them to better navigate Medicaid policy shifts and weather reimbursement challenges.