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Advocate and Aurora to Merge, Create New Integrated Health System

December 4, 2017
by Rajiv Leventhal
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Chicago-based Advocate Health Care and Milwaukee-based Aurora Health Care have announced a major merger between the organizations, one that will result in the creation of the 10th largest integrated healthcare system in the U.S., according to officials.

The new integrated organization, called Advocate Aurora Health, will serve nearly 3 million patients each year. The new organization will operate 27 hospitals, more than 500 sites of care, employ more than 3,300 physicians and nearly 70,000 associates and caregivers. “With combined annual revenues of approximately $11 billion, Advocate Aurora Health offers significant resources and the financial flexibility to expand investment and scale innovation,” officials said in an announcement today.

The two organizations cited enhanced scale, expanded access, greater efficiencies and a shared commitment to transform the care delivery model as key drivers for the merger.

The agreement is subject to state and federal regulatory review and approval, including the Federal Trade Commission and agencies within Illinois and Wisconsin. Closing is expected by mid-year 2018. Both the Advocate and Aurora Boards of Directors approved the plan, announcing the decision to physicians, nurses, associates and caregivers in both organizations today. The merger will build on the 20-year relationship the two health systems have had through the joint ownership and operation of ACL Laboratories, officials noted in a press release.

As noted today in the Chicago Tribune, Advocate earlier this year “walked away from a 2½-year bid to unite with NorthShore University Health System after a federal judge ruled in favor of the Federal Trade Commission, which had challenged the deal. The failed attempt cost Advocate $15 million.” However, as the report pointed out, in that case, the two health systems were very close together geographically, even having hospitals in the same Illinois counties. In this merger, Advocate’s hospitals are in the Chicago area and Central Illinois, while Aurora’s hospitals are in Wisconsin, though it operates three health centers in Northern Illinois. However, according to the Tribune piece, Jim Skogsbergh, president and CEO of Advocate said that “These markets are very distinct. This is not a series of ZIP codes in the northern area of Chicago.”

Skogsbergh said in a statement, “This merger is about transforming care delivery and reimagining the possibilities of health as bigger meets better and size meets value to benefit consumers. By joining forces we will be able to expand our network to scale innovation and create a destination in the Midwest for patients and the talented clinicians who care for them.”

Added Nick Turkal, M.D., president and chief executive officer of Aurora, “For the communities in Illinois and Wisconsin that we serve and for our two organizations, this is an unprecedented opportunity to shape our future and better serve patients. We are fortunate that our organizations are coming together from unique and complementary positions of strength, particularly at a time of evolving industry dynamics. Working together, we will deliver on the promise of value for the people who receive, provide and pay for healthcare.”

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