Erlanger signs letter of intent to become part of South Carolina health system
Wed, July 22, 2026 at 9:46 AM
UpdatedWed, July 22, 2026 at 6:10 PM
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File photo: WTVC
CHATTANOOGA, Tenn. —Erlanger Health has taken its biggest step yet toward a major partnership that leaders say is designed to strengthen the Chattanooga-based hospital system for decades to come
The health system announced Wednesday morning that it has signed a non-binding letter of intent with Prisma Health, a nonprofit healthcare system based in Greenville, South Carolina, to become part of that system
Hospital leaders emphasized that the announcement does not immediately change patient care or daily operations
“Nothing changes for patients, employees, physicians or daily operations while this process is underway,” Erlanger said.
Erlanger President and CEO Jim Coleman said the biggest change would be giving Erlanger access to the reanooga
“We will become part of a bigger system,” Coleman said. “It gives us access to capital where we can accelerate our strategic plans in the market.”
Coleman said Erlanger spent nearly a year evaluating whether partnering with another health system would better position it for the future
He said the decision was driven by several factors, including healthcare reimbursement challenges, the eventual sunset of Tennessee’s certificate of need law in 2030 and the hospital’s long-term capital needs
“We were in a position of strength,” Coleman said. “We really felt this was the right time to look for a partner instead of in a time when we’re really desperate for a partner.”
File photo: WTVC
Coleman said Erlanger’s improving financial position allowed leaders to be selective
He noted the hospital system improved its bond rating from Baa3 to an A rating over the past four years before beginning the search for a partner
If completed, the agreement would include $2 billion in strategic capital investments over 15 years
Coleman said Erlanger already has a five-year strategic plan and expects the investment to allow the health system to expand access to care much sooner than it could on its own
“We’ll be able to accelerate that much quicker than we would have on our own,” he said.
Prisma Health operates 20 hospitals and serves more than 1.6 million patients annually. Erlanger said the South Carolina-based system recently formed a similar partnership with Blount Memorial Hospital in Maryville
Erlanger has been treating patients with no healthcare coverage as a so-called ‘safety net hospital.’
Erlanger officials later confirmed for us that there are no plans to change this if the partnership is approved
Under the proposed agreement, Coleman would remain regional CEO for East Tennessee, leading what would become Prisma Health East Tennessee
He said Erlanger also would continue providing the community benefits it does today, including indigent care
“Our mission doesn’t change,” Coleman said. “We’re still Erlanger. We’re still here to take care of this community.”
File photo: WTVC
Hospital leaders emphasized the announcement does not immediately change patient care or daily operations
“Nothing changes for patients, employees, physicians or daily operations while this process is underway,” Erlanger said.
The organizations will now begin a period of due diligence and continued evaluation. Any final agreement must still be approved by Erlanger’s Board of Directors, the Erlanger Health Oversight Panel, the Hamilton County Commission and applicable state and federal regulators
Coleman said employees have responded positively to the announcement
“The more they thought about it, they’re excited and they see the opportunity,” he said. “We’re really looking forward to moving forward and starting through the due diligence.”
We are working on reaction to this announcement and will update this story throughout the day
Depend on us to keep you posted
