Advocate Health Tries Again With Hospital Merger

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Advocate Health Tries Again With Hospital Merger

They will create the 10th largest non-profit integrated health system in the country, according to the publication.

The proposed deal would serve as a "50-50 merger" between Chicago-based Advocate and Milwaukee-based Aurora, with no job layoffs expected, the companies said.

The combined heath care company would treat about 3 million patients yearly and have annual revenue of about $11 billion. Since the Tenet-Vanguard merger in 2013, a $4.3 billion acquisition, large-scale mergers between health systems have become routine to keep pace with an increasingly competitive and consolidated industry.

The biggest health care providers in Wisconsin and IL are reportedly joining forces. Chou says healthcare companies ultimately aim to mirror the "classic Kaiser model", referencing industry giant Kaiser Permanente of Oakland, California. In 2016, Advocate posted revenue of almost $5.6 billion and an operating income of $263.6 million.

"This merger is about transforming care delivery and reimagining the possibilities of health as bigger meets better and size meets value to benefit consumers", Advocate CEO and president Jim Skogsbergh, said in a statement.

The merger needs approval from state regulatory agencies in IL and Wisconsin and from the Federal Trade Commission. A federal judge granted the FTC a temporary injunction to stop the merger, which led the two IL systems to abandon the plan altogether.

The agreement includes a plan for a single board of directors comprising an equal number of members from Advocate and Aurora, with Skogsbergh and Turkal serving as co-CEOs. The two systems already have an established relationship, according to the announcement, as for 20 years they have jointly owned and operated ACL Laboratories. The parties expect the deal to close by mid-year 2018.

Wauwaotsa-based Froedtert Health recently expanded its affiliation with Kenosha's United Hospital System in a new agreement effective this fall, in which United Hospital System adopted the Froedtert & Medical College of Wisconsin brand and changed its name to Froedtert South.

"For the communities in IL and Wisconsin that we serve and for our two organizations, this is an unprecedented opportunity to shape our future and better serve patients", said Nick Turkal, M.D., president and chief executive officer of Aurora.

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