- Froedtert Health plans to acquire full ownership of insurer Network Health from Ascension Wisconsin, the Milwaukee-based health system announced Tuesday.
- The system agreed to buy the remaining 50% stake in the payer, which offers commercial and Medicare plans in 23 counties throughout the state, from Ascension Wisconsin. Froedtert originally acquired its stake in the company in 2014.
- Terms of the deal weren’t disclosed, and the health systems said a closing date will be determined after regulatory review and approval.
Founded in 1982, Network serves more than 117,000 members, according to a press release. Ascension Wisconsin will extend its provider agreement after the deal closes to stay in-network with the insurer’s members, the health systems said.
The acquisition will boost Froedtert’s population health strategy, allowing the system to “care for more people at the right place and at the right time,” President and CEO Cathy Jacobson said in a statement.
The COVID-19 pandemic may have pushed more health systems to partner with or acquire health plans in a drive to accelerate value-based care arrangements. Managing their patient populations’ health was traditionally an insurer's purview, and diversification could help boost bottom lines that were strained during the public health emergency.
But federal antitrust regulators have proposed updates to merger guidelines that could help them more successfully prevent vertical consolidation and private equity roll-ups, which could slow dealmaking in the healthcare sector, experts told Healthcare Dive.
Acquiring full ownership in Network marks another M&A move for Froedtert, which last month announced its board had approved a definitive merger agreement with fellow Wisconsin-based nonprofit health system ThedaCare. Pending regulatory approval, the combination is expected to close early next year.
In partnership with the Medical College of Wisconsin, Froedtert operates 10 hospitals with more than 2,100 physicians and over 45 health centers and clinics. ThedaCare’s network includes seven hospitals and more than three dozen clinics.