Sentara Healthcare is pursuing a deal to affiliate with Greensboro, North Carolina-based health system Cone Health.
The two organizations signed a letter of intent to combine into one. Norfolk, Virginia-based Sentara, a non-profit integrated health system, would have majority governance over the combined organization with representation from Cone Health.
Sentara's CEO Howard P. Kern would oversee the combined organization with the corporate headquarters remaining in Norfolk. The Cone Heath division of the company would have a regional headquarters in Greensboro.
Terry Akin, CEO of Cone Health, would remain in Greensboro as the president of the Cone Health division.
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Additional terms of the deal were not disclosed.
If it is ultimately approved by regulators and finalized, the deal would be expected to close in mid-2021. Officials said they anticipate it would take up to two years to fully combine.
"This rapidly changing healthcare environment requires tremendous transformation and innovation to ensure the long-term success of each respective health system and, most importantly, the very best for those we are privileged to serve," Kern said in a statement. "We can either react to change, or we can shape it. We are choosing to shape change and will lead this transformation of healthcare together."
Sentara already has 12 hospitals in Virginia and northeastern North Carolina with more than 1,200 physicians and 30,000 employees. It also has the Optima Health Plan and Virginia Premier Health Plan with 858,000 members in Virginia, North Carolina and Ohio.
Cone Health, which is also an integrated healthcare network, brings five hospitals, nearly 1,200 physicians and 13,000 employees. It has a Medicare Advantage health plan called HealthTeam Advantage which has 15,000 members.
"In Sentara Healthcare, we've found a like-minded organization who shares our commitment to transforming healthcare. The combined organization will build on our shared commitments and distinct expertise to promote better health outcomes and minimize healthcare costs for consumers," Akin said in a statement. "Our integration strengthens and accelerates our shared mission and strategy to transform healthcare in the communities we serve. We have long said we will not grow, just for growth's sake. We are joining forces to tackle the toughest challenges in healthcare."