SYRACUSE, N.Y. (WSYR-TV) — Upstate Medical University and Crouse Health have announced a joint decision not to merge at this time.

In a statement, a spokesperson writes:

“Both institutions will continue to operate as separate and independent legal entities governed as they are today.”

Instead, the organizations will enter what they call a “strategic affiliation agreement.”

That agreement “will allow for future collaboration on programs to improve access to care and enhance quality for our patients and the Central New York community,” wrote the spokesperson.

While leaders at the institutions were publicly defensive of joining the systems, the plan was met with criticism from some employees and most impactfully, the Federal Trade Commission.

Last year, the FTC wrote: “The proposed merger presents substantial risk of serious competitive and consumer harm in the form of higher healthcare costs, lower quality, reduced innovation, reduced access to care, and depressed wages for hospital employees.”

Now, the hospitals have formally withdrawn their application from the State Health Department.

“This is not the outcome we anticipated when we started down this road, but it is the prudent decision at this time and is a result of the economic and operational headwinds health care is facing, not just here in Syracuse, but nationwide,” said Dr. Mantosh Dewan, President of Upstate Medical University. “Should circumstances sufficiently change moving forward, we will consider revising and resubmitting applications for a CON and COPA that would authorize Crouse Health to become a division of SUNY Upstate Medical University.  In the meantime we look forward to working with Crouse under the affiliation agreement.”

“Crouse Health’s mission is to provide the best in patient care and promote community health. We believe this is best accomplished in partnership with Upstate Medical University. Our goal is to utilize the affiliation agreement as an important framework for collaborating for the benefit of the community,” said Patrick Mannion, Chair, Crouse Health Board of Directors. “Crouse remains well positioned and committed to providing vital services to our community with the support of our dedicated medical staff and employees.”