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The basics:

• Atlantic Health, Saint Peter’s Healthcare cancel planned partnership
• Decision follows strategic review amid evolving health care landscape
• Both systems continue collaboration via Healthcare Transformation Consortium
• Saint Peter’s, RWJBarnabas previously ended merger talks in 2022

Atlantic Health and Saint Peter’s Healthcare System are pulling the plug on plans for a partnership.

Following an initial announcement in January 2024, as well as a definitive agreement last June, the health care providers said in a joint Oct. 6 statement they mutually decided not to pursue the planned member substitution transaction.

The New Jersey systems said the move follows “lengthy discussion and careful analysis” of the rapidly evolving national health care landscape and its effects on local hospitals and operators.

Looking ahead

“Although we have agreed to mutually terminate the pending transaction, we are disappointed by this result,” said Leslie Hirsch, president and CEO, Saint Peter’s Healthcare System. “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.”

The health system declined to comment further on whether it will pursue another strategic alliance or merger.

Since entering the pact, Atlantic Health has undergone a leadership transition, welcoming President and CEO Saad Ehtisham over the summer to succeed retiring Brian Gragnolati.

“While disappointing, unfortunately we have determined that this is the most appropriate path forward,” said Ehtisham. “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.”

The partners will still work together as part of the Healthcare Transformation Consortium, “and potentially other efforts to ensure the residents of central New Jersey have access to the highest quality of care,” they said.

Changing scene

This marks the second cancelled collaboration for Saint Peter’s in recent years. In 2022, the New Brunswick health care system and RWJBarnabas Health called off plans to merge, after the Federal Trade Commission moved to block the deal.

So far in 2025, hospital mergers have slowed compared with last year. As of July, Chief Healthcare Executive reported just 13 deals announced this year, compared with 72 from 2024. The report noted industry watchers cite economic uncertainty, changes in federal policy and higher supply costs due to tariffs as potential contributing factors.

Getting together

Marlton-based Virtua Health said July 16 it signed a non-binding letter of intent with ChristianaCare to explore co-founding a regional not-for-profit entity that would establish a new health system covering parts of four states. Read more about the deal here.

In January 2025, a report released by the U.S. Department of Health and Human Services dug into the impacts of consolidation in the sector. According to the study, requests for information exposed two major trends: increasing market consolidation along with an influx of private equity and other investors.

As for effects, provider consolidation brings with it higher prices and less access for patients, the study found, while health services M&A produces changes and quality reductions, particularly in PE-backed deals.

Delivering care

In New Jersey, hospitals contribute more than $31.4 billion in direct economic benefits, according to the New Jersey Hospital Association. Atlantic Health is among the top-ranked, in that regard, generating $2.89 billion and more than 10,500 full-time equivalent jobs.

Based in Morristown, Atlantic Health says it serves 14 counties and 7.5 million people in New Jersey. Among its 550 sites of care, it counts eight hospitals:

• Morristown Medical Center Morristown
• Overlook Medical Center Summit
• Newton Medical Center Newton
• Chilton Medical Center Pompton Plains
• Hackettstown Medical Center Hackettstown
• Goryeb Children’s Hospital Morristown
• Atlantic Rehabilitation Institute Madison
• CentraState Medical Center Freehold

Saint Peter’s Healthcare System features Saint Peter’s University Hospital. The Roman Catholic Diocese of Metuchen sponsors the 478-bed acute-care teaching hospital. Saint Peter’s is also a state-designated children’s hospital and regional perinatal center. Additionally it boasts other regional specialties, such as in diabetes, gastroenterology, head and neck surgery, oncology, orthopedics and women’s services.