A proposed merger that will create one of the largest U.S. nonprofit, integrated healthcare systems has moved closer to becoming a reality.
The Wisconsin Office of the Commissioner of Insurance approved the merger involving Advocate Health Care and Aurora Health Care. The Federal Trade Commission (FTC) and Illinois Health Facilities and Review Board also gave their OK in February.
The deal is expected to close by April 1.
The new Advocate-Aurora Health Care system will operate more than 500 sites of care and 27 hospitals, employ more than 3,300 physicians, nearly 70,000 associates and caregivers and serve almost three million patients annually.
The companies said the new entity will be the 10th largest U.S. nonprofit, integrated system. Advocate-Aurora will have combined annual revenues of about $11 billion.
Advocate Health Care, a nonprofit, mission-based health system affiliated with the Evangelical Lutheran Church in America and the United Church of Christ, is the largest health system in Illinois with nearly 400 sites of care and 12 hospitals.
Aurora Health Care, a nonprofit Wisconsin-based provider, has sites in more than 30 counties in eastern Wisconsin and northern Illinois. The company is Wisconsin’s largest private employer and serves more than 1.2 million patients annually in its more than 150 clinics, 15 hospitals and more than 33,000 caregivers.
Jim Skogsbergh, president and CEO at Advocate, and Dr. Nick Turkal, Aurora president and CEO, will share CEO duties for Advocate-Aurora.
Skogsbergh said the teams are working on an integration plan “to allow us to accelerate our efforts on safety, health outcomes, consumer experience and cost.”
The merged company will have a single board of directors that will be comprised of equal members from Advocate and Aurora. Advocate Aurora Health will maintain dual headquarters in Downers Grove, Illinois, and Milwaukee, Wisconsin.
The merger comes after Advocate tried to merge with NorthShore University Health System last year, but that stalled after the FTC challenged the deal. The FTC argued the NorthShore deal would have increased prices for consumers by 8% and potentially lower quality. The agency didn't cite that issue with the Aurora merger.
Nearly three months into 2018, healthcare M&A activity remains hot as health systems and hospital systems try to find ways to remain competitive with lower reimbursements and inpatient traffic.