Dive Brief:
- Two hospital systems in Wisconsin and Illinois have signed off on a merger that will create a new nonprofit health system worth $1.45 billion in revenue. The two organizations, Rockford Health System based in Rockford Township, IL and Mercy Health system based in Janesville, WI, could be combined before the year's end.
- The new parent company will be led by Javon Bea, president and CEO of Mercy. The new system will be comprised of five hospitals and 80 outpatient clinics that employ more than 550 physicians.
- Rockford, the smaller of the two organizations, will add specialty pediatric and neonatal care that is not currently provided by Mercy, Bea told Crain's Chicago Business. In recent years, Mercy has invested more than $220 million to update its facilities.
Dive Insight:
Rockford has been trying for years to find another, larger system with which to merge so it can remain competitive in a challenging market. In 2008, Illinois' largest hospital system, Advocate Health Care, was in talks with Rockford, but they quickly ended. Cadence Health was also near an agreement with the organization, which failed in January. Other talks were unsuccessful because of minor representation on the boards of directors, according to Crain's. The newly-created system will have a nine-person board with four representatives from both organizations.