New Jersey nonprofits Atlantic Health and Saint Peter’s Healthcare System have called off plans to merge, citing changes in the national healthcare landscape for their mutual decision.
The organizations had announced their intent to pursue a deal in early 2024, and had signed a definite agreement in June of the same year. The member substitution transaction would have brought Saint Peter’s under Atlantic Health, creating a system with more than $5 billion in annual revenue, based on each organization’s 2024 financial statements.
“While disappointing, unfortunately, we have determined that this is the most appropriate path forward,” Saad Ehtisham, president and CEO of Atlantic Health, said in Monday’s announcement. “Despite this, our two organizations have enjoyed a shared history of collaboration on behalf of our patients that I hope will continue to guide our work in the future.”
Morristown, New Jersey-based Atlantic Health System spans five acute care hospitals, a children’s hospital, and employs nearly 22,000 people as of 2024. That same year, it posted am operating income of $103.4 million, slightly outpacing the $145.6 million of 2023. Halfway through 2025, its operating income stands at $66.7 million, slightly outpacing the prior year’s six-month period.
New Brunswick, New Jersey-based Saint Peter’s is one of the state's few single-hospital health systems. The Catholic system is led by its 478-bed Saint Peter’s University Hospital, which also includes a children’s hospital. It logged a $40 million operating income in 2024, up from 2023’s $18.3 million, and across two quarters of 2025 holds a $13.6 million operating income.
The organizations had touted “significant synergies” that would flow from their combination, including stronger clinical service integration, a fleshed-out physician network and the transition of Saint Peter’s onto Atlantic Health’s electronic health record system. Their definitive agreement also outlined “substantial capital investments" that Atlantic Health had planned for its partner, as well as an expansion of outpatient services.
The announcement does not specify the nationwide trends that led to the deal’s dissolution, though analysts and other health systems across the country have largely pointed to inflationary pressures, reimbursement challenges and upcoming changes in federal health coverage and funding programs as causes for concern.
Though the merger is off, the systems said they hope to maintain existing collaborations—such as a partnership of independent systems called the Healthcare Transformation Consortium that collective bids out for third-party administration of their self-insured employee health plans—"and potentially other efforts to ensure the residents of central New Jersey have access to the highest quality care.”
“Although we have agreed to mutually terminate the pending transaction, we are disappointed by this result,” Leslie D. Hirsch, president and CEO of Saint Peter’s Healthcare System, said in the announcement. “Saint Peter’s has proudly fulfilled its Catholic mission for over 118 years in the communities it serves. Saint Peter’s takes great pride in the fact that it is well-positioned for continued success, as it now rethinks its future.”
Of note, Atlantic Health and Saint Peter’s collapse comes just a few years after Saint Peter’s bid to join with RWJBarnabas Health was shot down by federal regulators.