Crouse Hospital and Upstate University Hospital will no longer seek a merger, withdrawing the current Certificate of Need (CON) and the Certificate of Public Advantage (COPA) applications, officials from both hospitals announced Thursday.

The two medical facilities will be under a strategic affiliation agreement, however, which will allow for future collaboration on certain programs, but both institutions will continue to operate as separate and independent legal entities.

Upstate University Hospital announced their intention to acquire Crouse in April.

"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 Upstate President Mantosh Dewan. "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."

Combining the two hospitals, according to Crouse, would have offered "significant opportunities in terms of enhanced care delivery, increased access to patient care, including care with limited availability in the region." The Federal Trade Commission recommended against the merger last fall.

"It is very good news for patients and healthcare workers in upstate New York that this proposed merger is not going to happen," the FTC said in a statement Friday. "As we said in our comment to the New York State Department of Health, the deal presented 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."

"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 of the 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."