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.