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St. Luke's completes affiliation with Aspirus Health

The expanded health system now operates 19 hospitals and 130 outpatient locations with nearly 14,000 team members.

Jeff Lagasse, Editor

Photo: Franco Vogt/Getty Images

St. Luke's, based in Duluth, Minnesota, has officially completed its affiliation with Wausau, Wisconsin-based Aspirus Health. 

The expanded health system now operates 19 hospitals and 130 outpatient locations with nearly 14,000 team members, including 1,300 employed physicians and advanced practice clinicians across northeastern Minnesota, northern and central Wisconsin, and the Upper Peninsula of Michigan. 

The system will operate headquarters in Wausau and maintain a corporate office in Duluth. 

The combined system will collaborate in clinical care, sharing medical knowledge and resources in a push to improve care coordination and increase patient access. Hospital officials expect this will improve patient outcomes and provide more cost-effective services.

WHAT'S THE IMPACT?

The two organizations signed a letter of intent to affiliate last summer, and since then have signed a definitive agreement, completed due diligence and participated in a public forum with the Minnesota Attorney General's office in Duluth last fall. The affiliation has satisfied all necessary governmental notices, waiting periods and approvals, and completed the Minnesota Attorney General's review process. 

Aspirus said it has made a number of commitments as part of the affiliation. Among them are to honor all physician, labor and union contracts; invest at least $300 million over eight years to fund St. Luke's strategic projects; implement the Epic electronic medical record platform and other standard systems to promote integration and efficiency within 24 months; and expand Aspirus Health Plan into St. Luke's service area within two years, subject to regulatory constraints and timelines.

Patient care and services will continue as usual, and patients will be able to keep seeing their current providers. Clinic locations and phone numbers will remain the same, the systems said.

"We see our affiliation with Aspirus Health as a continuation of our mission and passion to care for our patients and communities," said Eric Lohn, St. Luke's co-president. "Together, we are stronger, and we will grow and transform to meet the changing needs of our communities."

THE LARGER TREND

An October Kaufman Hall analysis found 39% of the announced transactions during that time were spurred at least in part by financial distress.

While partnership, merger and acquisition activity is returning to pre-pandemic levels, regulatory scrutiny of these transactions is also increasing. New proposed merger guidelines were issued by the Federal Trade Commission (FTC) and the Department of Justice (DOJ) in July.

While the guidelines determine a merger's effect on competition in industries ranging from food and agriculture to healthcare, they are expected to impact the latter as health system M&A continues to climb back to pre-pandemic levels.

Since 1968, the DOJ and FTC have issued and revised merger guidelines several times, including 1982, 1984, 1992, 1997, 2010 and 2020.
 

Jeff Lagasse is editor of Healthcare Finance News.
Email: jlagasse@himss.org
Healthcare Finance News is a HIMSS Media publication.