Abington and Holy Redeemer released a joint statement Wednesday saying they would no longer pursue their effort to create a regional health system.
The institutions unleashed a storm of criticism last month after announcing the plan would mean ending abortion services at Abington Memorial Hospital.
Holy Redeemer has Roman Catholic roots and does not offer the procedure.
Doctors at Abington blasted the proposal, saying they were never consulted. Some threatened to leave the hospital. Community members also questioned how other medical services might be affected by the new religious alliance.
The companies had proposed the partnership in an effort to become more cost-efficient and competitive.