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Erlanger Health signs letter of intent to partner with Prisma Health. July 27, 2026- Erlanger Health System has signed a non-binding letter of intent (LOI) to enter into a strategic partnership with Prisma Health, a move that would expand Prisma's footprint into Tennessee while bringing a planned $2 billion investment to the Chattanooga-based health system. If finalized, the partnership would create a 27-hospital nonprofit system serving communities across South Carolina and Tennessee. The proposed investment is intended to accelerate Erlanger's strategic growth, modernize facilities, expand specialty services, enhance technology and strengthen workforce development. Leaders from both organizations emphasized that the partnership is designed to preserve Erlanger's mission, local leadership, academic medicine programs and safety-net services, including its Level I Trauma Center and Children's Hospital. Prisma Health also plans to establish its East Tennessee regional headquarters in Chattanooga, with Erlanger President and CEO Jim Coleman serving as Regional CEO for East Tennessee. The agreement remains subject to due diligence, a definitive agreement and approvals from Erlanger's governing boards, Hamilton County officials and state and federal regulators. Hospital leaders said patients, physicians and employees will see no immediate changes while the review process moves forward.

Erlanger seeks to join South Carolina health system in proposed $2 billion deal. Erlanger Health could become part of one of the Southeast's largest nonprofit health systems under a proposed partnership with South Carolina-based Prisma Health, a move leaders say would bring $2 billion in investments over 15 years and transform Chattanooga's flagship safety-net hospital. Health system leaders have signed a nonbinding letter of intent, beginning a 120-day due diligence period before the proposal can move forward. Any final agreement must still be approved by Erlanger's board, the Erlanger Health Oversight Panel, Hamilton County commissioners and state and federal regulators. Jim Coleman, Erlanger's president and CEO, said the agreement would allow much-needed upgrades to facilities and equipment, expand outpatient care and strengthen the health system's ability to keep up as the industry increasingly shifts away from traditional hospital campuses. "We see what we need every day, and we just can't write a check for it and buy it," Coleman said in an interview. Erlanger is the last remaining Chattanooga-based independent hospital system. Its primary competitors are part of much larger organizations - Chicago-based CommonSpirit Health, a national nonprofit health system, and Nashville-based HCA Healthcare, one of the nation's largest for-profit hospital companies - giving them access to substantially greater financial resources for expansion and capital projects. Dr. Christopher Poole, an Erlanger board member and medical staff leader who helped evaluate potential partners, said the health system is grappling not only with aging infrastructure but also mounting financial pressure from federal Medicaid cuts and state policy changes outside Erlanger's control. As a result, the board concluded it would be difficult to carry out its long-term modernization plans alone, he said. Those plans largely center on expanding Erlanger's outpatient footprint through standalone surgery and imaging centers. Poole said the proposed partnership would give Chattanooga-area patients access to the kinds of facilities, technology and specialty care commonly found in larger metropolitan areas. "The physicians here will be excited to have resources, to have the equipment and facilities that they need to provide the care for patients that we would want for our family members," he said. "And if you can do that, you can continue to recruit good, young, talented physicians to the area." The proposal comes three years after Erlanger moved from a public hospital authority to a private nonprofit organization, a transition leaders said gave the health system greater financial and strategic flexibility while preserving some public oversight. As part of that transition, Erlanger entered a 15-year mission agreement requiring it to preserve its role as a safety-net provider, teaching hospital and regional referral center while maintaining certain services, including its children's hospital and Level I trauma center. If the deal is approved, Erlanger will keep a local board for up to nine years and get two seats on Prisma's 11-member corporate board, Coleman said. "That was something they gave to give us a little more comfort, that there's going to be Chattanooga voice and direction from Chattanooga," Coleman said. Prisma would establish its East Tennessee regional headquarters in Chattanooga, where Coleman would serve as regional CEO. The health system already operates Blount Memorial Hospital in Maryville. Coleman said Erlanger considered multiple potential partners before selecting Prisma because leaders believed it best matched the health system's mission and long-term vision. Based in Greenville, Prisma Health is South Carolina's largest nonprofit health system, formed in 2017 through the merger of Greenville Health System and Palmetto Health. The system includes 20 hospitals, including specialty hospitals, more than 3,000 licensed beds and more than 490 physician practice sites while serving more than 1.6 million patients annually across South Carolina and Tennessee, according to the health system's 2025 fiscal year statistics. Like Erlanger, Prisma operates the only Level I adult trauma center in its region and has children's hospitals in both Greenville and Columbia with pediatric intensive care, neonatal intensive care and dozens of pediatric subspecialties. Prisma has felt like a partner from the beginning, Coleman said. "I've never heard the words... 'We're going to buy you out. We're taking you over.' That's not the attitude," he said, but he added, "That's what's happening. We're becoming part of the system for a huge investment. "But... they're going to profit from that investment, and so is Chattanooga," he said. Coleman said years of work by Erlanger employees transformed the health system into an attractive partner for a nonprofit organization with similar values, adding that the proposed deal would strengthen - not change - Erlanger's longstanding mission to care for all patients. All employees and medical staff in good standing will remain part of Erlanger for now and eventually move to Prisma's payroll and benefits system. At this time, nothing is changing for patients, and all appointments and services will continue as usual, he said. Details of co-branding are still in the works, but Erlanger will always be part of the name, he said. After four months of due diligence and signing an agreement, Coleman estimated it would take about a year to convert all of Erlanger's systems to theirs. "It's going to create lots of opportunities for the employees," Coleman said, referring to the outpatient facilities and expansion projects Erlanger hopes to build through the partnership. "All these new sites, we're going to be probably adding to our workforce instead of taking away from our workforce." Erlanger is launching a website, erlangerfuture.org, for those seeking information and updates.

Erlanger Health System signs Letter of Intent to partner with Prisma Health. Prisma Health Media Relations Wednesday, July 22, 2026 Proposed partnership will include $2 billion in strategic investments to strengthen access to care and accelerate innovation and growth in the Chattanooga Region Chattanooga, Tenn. - [July 22, 2026] - Chattanooga healthcare market leader Erlanger Health System has signed a non-binding Letter of Intent (LOI) to enter into a strategic partnership to join Prisma Health, one of the Southeast's leading nonprofit health systems. 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. "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," said Jim Coleman, President and CEO of Erlanger. "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 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. "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." 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 a better state of health. 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. "Taking care of patients is our top priority," Sheila Boyington, Immediate Past-Chair of the Erlanger Board of Directors said. "Prisma Health will augment what we already do well, enabling us to take patient care in our region to the next level more quickly. Greenville and Chattanooga share many similarities, and we believe the regional, patient-first focus of Prisma Health adds to the cultural fit of this partnership." A Bold, Shared Vision for the Future As one of the Southeast's leading nonprofit healthcare systems, Prisma Health serves more than 1.6 million patients annually through 20 hospitals and a broad network of physicians, providers, educators and researchers. With a shared commitment to maintaining the community and mission covenants of Erlanger and leveraging the $2 billion in investments, the partnership will: * 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. Jim Coleman, current CEO and President of Erlanger, 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. Next Steps 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. "We are an attractive partner because of the extraordinary work our physicians, providers, nurses and employees have done over the last several years," Coleman said. "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." For more information and updates please visit erlangerfuture.org. About Erlanger. Erlanger is a private, non-profit health system based in Chattanooga, Tenn., 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. Visit www.erlanger.org and follow Prisma on LinkedIn, Facebook and Instagram. About Prisma Health. 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. Connect with Prisma Health on Facebook, Instagram, LinkedIn, Twitter/X and TikTok. Visit PrismaHealth.org