BREAKING: State Board Approves Advocate Aurora Merger with Atrium Health
After months of delay, a state board in Illinois on Monday, Nov. 14 approved the merger of the 27-hospital Advocate Aurora Health and Atrium Health, based in the Chicago suburb of Downers Grove, Ill., and Milwaukee, Wis., allowing Advocate Aurora to combine with the 40-hospital Atrium, which is based in Charlotte, N.C. The combined organization will be known as Advocate Health, according to senior executives at the two organizations, while the Atrium Health and Advocate Aurora brands will also continue to be used in their respective local markets. Wake Forest University School of Medicine will be the academic core of the combined entity.
The Chicago Tribune’s Lisa Schencker authored a breaking-news article that began thus: “A state board approved a plan Monday by Advocate Aurora Health to combine with Southern system Atrium Health, after initially withholding support for the deal. The state Health Facilities and Services Review Board voted 6-0 Monday afternoon to allow the combination to move forward. The union would create one of the largest health systems in the country, with 67 hospitals and more than 1,000 sites of care across Illinois, Wisconsin, North Carolina, South Carolina, Georgia and Alabama,” she wrote.
Further, Schencker noted, “The vote followed months of uncertainty over the combination. When the issue first came before the board in September, board members said they didn’t understand key terms of the transaction. To the surprise of many, the board did not approve the applications in September, and voted then to reconsider the issue at a future meeting. Since that September meeting, Advocate Aurora answered many of the board’s questions in letters sent to the board, such as the reasons for the combination and the proposed governance structure. Several board members, however, expressed frustration Monday, even as they voted yes, with the rules and limitations surrounding their positions. The board is required by law to approve certain types of applications as long as they are complete.”
The reversal on the part of the Health Facilities and Services Review Board came after an earlier vote denying the merger. As Susan Morse of Healthcare Finance News had written on Sep. 14, “The Illinois Health Facilities & Services Review Board yesterday voted 3-2 to deny a change of ownership request for the Advocate Aurora Health and Atrium Health merger. The board later voted to reconsider the vote. It next meets on Dec. 13. Board members reportedly said they were not given enough details about operational matters and the controlling interests of the new entity, according to the Daily Herald. The State Board had also received letters of opposition, according to information released by the board,” including from the SEIU Healthcare Union, which had sent a letter to the board on Aug. 24 opposing the proposed merger.
Advocate Aurora said in a statement that Monday’s “approval brings us one step closer to coming together with Atrium Health, which will allow us to improve the lives of our patients, the health of our communities and the opportunities for our team members.” Advocate Aurora expects the deal will close before the end of the year, and said it is continuing to work with the Federal Trade Commission “and other appropriate officials to address their questions.”
Under the proposed deal, Advocate Aurora and Atrium would form a joint operating company to be called Advocate Health, though Atrium’s hospitals would keep the Atrium name, Advocate’s Wisconsin hospitals would keep the Aurora name, and its Illinois hospitals would still be called Advocate. No money would change hands, and existing assets would remain in the states where they are now.
Back in the spring, when they announced the deal, executives from the two health systems posted a press release to both organizations’ websites on May 11 that stated that “Advocate Aurora Health and Atrium Health today announced their plans to come together to create a leading health and wellness delivery system to best meet patients’ needs by redefining how, when and where care is delivered. The organizations cited their complementary strengths, diverse experiences and enhanced capabilities as key enablers to improve lives.” “The world of healthcare as we know it is changing at warp speed – and it is rapidly becoming more digital, personalized, scientific and complex,” said Eugene A. Woods, president and chief executive officer of Atrium Health, in a statement contained in the press release. “This strategic combination will enable us to deepen our commitments to health equity, create more jobs and opportunities for our teammates and communities, launch new game-changing innovations and so much more. Together, we will manifest a new future that significantly elevates the care we provide to every hand we hold and every life we touch.” And Jim Skogsbergh, president and CEO of Advocate Aurora Health stated in the same press release that, “Together, we can do more, be better and go faster. This combination harnesses our complementary strengths and expertise of our doctors, nurses and teammates to lead health care’s transformation for those we are so proud to serve.”
The press release noted that, “The new organization will have a combined footprint across Illinois, Wisconsin, North Carolina, South Carolina, Georgia and Alabama. It will serve 5.5 million patients, operate more than 1,000 sites of care and 67 hospitals, employ more than 7,600 physicians and nearly 150,000 teammates and have combined revenues of more than $27 billion.”
Advocate Aurora currently operates 27 hospitals and more than 500 outpatient clinics across northeastern Illinois and eastern Wisconsin, with 10,00 doctors, 22,000 nurses, and 75,000 team members, according to its website. Meanwhile, Atrium Health, according to its website, operates 40 hospitals and 1,400 care locations, and 70,000 “teammates.”
