Chattanooga healthcare market leader Erlanger Health has signed a non-binding Letter of Intent to enter into a strategic partnership to join Prisma Health, one of the Southeast’s leading nonprofit health systems, officials announced on Wednesday.

The partnership "will build on Erlanger’s deep legacy of high-quality, compassionate care and position the organization for long-term sustainability, growth, innovation and success," it was stated.

Jim Coleman, president and CEO of Erlanger, said, “More than 130 years ago, Erlanger was founded through an extraordinary gift that reflected a belief in our community and its potential, and today this investment assures our ability to meet our mission well into the future.

“By partnering with Prisma Health, we will be able to fast track our vision and keep Erlanger at the forefront of medicine. Together, we will ensure Erlanger remains a leader in healthcare for the next century and beyond.”

The proposed partnership, which officials said includes $2 billion in strategic capital investments to expand access and advance care delivery, "follows a thoughtful and extensive evaluation process led by Erlanger’s Board of Directors, and is designed to protect services the community depends on while strengthening the regional economy," it was stated.

“Erlanger has a history of leading the market in the levels of care and patient experience that we provide,” said Barry Large, chair of the Erlanger Board of Directors. “Healthcare is changing rapidly and we knew that given our position of strength and national recognition for our clinical quality, we had a responsibility to explore options that would allow us to accelerate our plans forward to an even brighter future.”

Officials said, "Like Erlanger, Prisma Health has a geographically focused strategy with a commitment to a healthier community. They understand the importance of leveraging regionally based experts to provide the personalized care their communities need to create The LOI marks an important milestone, but it is only the beginning of the process. Both organizations will now enter a period of due diligence and continued evaluation. Any final agreement would be subject to approval by Erlanger's Board of Directors, the Erlanger Health Oversight Panel, Hamilton County Commission and applicable federal and state regulatory authorities.

"Nothing is changing today for patients and all appointments and services will continue as usual. Erlanger remains committed to transparency and will continue engaging employees, physicians, community leaders and the public throughout the process."

Mr. Coleman said, “We are an attractive partner because of the extraordinary work our physicians, providers, nurses and employees have done over the last several years. Their dedication has made Erlanger the strong, respected health system it is today, making it possible for us to secure the interest of a highly-respected health system that shares our values and vision for the future. We have never been more committed to our mission to compassionately care for all, and that commitment remains unchanged.”

• Enhance access to specialized and complex care in Erlanger’s service areas through expanded clinical capabilities, specialty services, and investments in innovation and technology.
• Bring new investment to add more funding to important long-term capital and facilities projects such as improving the Erlanger East Hospital campus and Erlanger Baroness Hospital.
• Protect mission critical programs including the system’s Level I Trauma Center and Children’s Hospital along with safety-net operations and transplant programs.
• Enrich academic partnerships, graduate medical education, residency programs and research while maintaining its position as a teaching organization.
• Support Erlanger’s ability to grow and strengthen its workforce – “the heart of Erlanger” - through continued investment in its physicians, nurses and employees through enhanced recruitment, retention and professional growth opportunities.
• Enhance Erlanger’s ability to adapt and thrive in a complex, competitive healthcare and regulatory environment."

“Protecting and securing Erlanger's mission, culture and legacy is a priority in our proposed partnership,” said Mark S. O'Halla, president and CEO of Prisma Health. “This partnership will help ensure Erlanger has the support and expertise necessary to build on its momentum and serve its communities at the highest level for decades to come.”

As part of this partnership, Prisma Health will establish its East Tennessee regional headquarters in Chattanooga, further strengthening its commitment to serving communities across the region, it was stated.

Mr. Coleman will lead as Regional CEO for East Tennessee, providing leadership and oversight of Erlanger and guiding the organization’s growth and integration throughout the market. All employees and medical staff in good standing will be retained and the Erlanger name will continue to be used in future branding. Erlanger will continue to have a dedicated leadership team and occupy the majority of seats on a newly created/established Prisma Health Eastern Tennessee board. Additionally, Erlanger will have representation on the Prisma Health corporate board.

Erlanger is "a private, non-profit health system based in Chattanooga, affiliated with the University of Tennessee Health Science Center College of Medicine. The seven-hospital system includes the region's only Level I Trauma Center, children's hospital, Level IV NICU, kidney transplant center, 24/7 stroke care, and many more essential services. Children's Hospital at Erlanger provides the highest level of trauma, critical, and inpatient care. Erlanger is the sole provider of tertiary care services spanning a 50,000 square-mile region encompassing southeast Tennessee, northwest Georgia, north Alabama, and western North Carolina. The health system comprises seven hospitals and emergency departments, provides medical services for a fleet of six helicopters, and offers exceptional, comprehensive care at all of life's stages. With a history of over a century, Erlanger continues its founding mission to compassionately care for people."

Prisma Health is "recognized as one of “America’s Most Innovative Companies” by Fortune. Prisma Health is a private nonprofit health company with over 32,000 team members, 19 acute and specialty hospitals, 3,131 licensed beds, 320 practice sites, and more than 5,900 employed and independent clinicians across its clinically integrated inVio Health Network. Each year, Prisma Health serves more than 1.6 million patients in South Carolina and Tennessee. Based in
Greenville, South Carolina, Prisma Health’s commitment to local healthcare was a driving factor in the Board’s decision, setting them apart from other national health systems.