Norfolk-based Sentara Healthcare announced Wednesday it has signed a letter of intent to combine organizations with Greensboro, North Carolina-based Cone Health.

Transaction details were not disclosed. Sentara President and CEO Howard P. Kern will oversee the combined organization, which will have about $11.5 billion in combined revenue. The corporate headquarters of each organization will remain in Norfolk and Greensboro, North Carolina, respectively. 

“This rapidly changing health care 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.”

Some of the health systems’ goals for merging include increasing health insurance options, building technology platforms and growing community impact.

The larger health care company’s Greensboro location will serve as the regional headquarters for the Cone Health division and current Cone Health CEO Terry Akin will remain in Greensboro as president of the Cone Health division.

“In Sentara Healthcare, we’ve found a like-minded organization who shares our commitment to transforming healthcare,” Akin said in a statement. “The combined organization will build on our shared commitments and distinct expertise to promote better health outcomes and minimize healthcare costs for consumers.”

The Sentara Healthcare Board of Directors and Cone Health Board of Trustees have each approved the terms of the letter of intent, but the combined organization is subject to state and federal regulatory review and closing conditions. The transaction is expected to close by mid-2021 and it is anticipated that it will take up to two years for the organizations to fully combine and integrate.

Sentara has 12 hospital locations in Virginia and northeastern North Carolina. The health system employs more than 1,2000 physicians and 30,000 people who serve in other roles. Sentara’s Optima Health Plan and Virginia Health Plan serve 850,000 members in Virginia, North Carolina and Ohio. The Cone Health system includes five hospitals in North Carolina, and the health system employs more than 13,000 people. Through its Medicare Advantage health plan, HealthTeam Advantage, it serves 15,000 members.

“Our integration strengthens and accelerates our shared mission and strategy to transform healthcare in the communities we serve,” Akin said in a statement. “We have long said we will not grow, just for growth’s sake. We are joining forces to tackle the toughest challenges in health care.”

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