AdventHealth, Ascension are unwinding Chicago-based joint venture Amita Healthcare
No reason was given for the break-up during a time when consolidations are increasing.
Photo: Bjarte Rettedal/Getty Images
AdventHealth and Ascension have announced a joint decision to unwind their six-year old Amita Health partnership serving the Chicago area.
Following the transition, AdventHealth and Ascension will operate their individual hospitals and related healthcare facilities in the Chicago area.
"After working closely together for nearly seven years, Adventist Health System Sunbelt Healthcare Corporation d/b/a AdventHealth and Ascension have decided to unwind their AMITA Health partnership, the joint operating company serving the healthcare needs of residents of the greater Chicago area," according to an Advent Health statement.
There were no specific details as to when the break-up is expected to be finalized nor additional details on the reason behind the dissolution of the partnership.
The Chicago Tribune reported Amita spokeswoman Olga Solares as saying it was not clear whether jobs or services would be impacted by the decision, although the published joint statement noted there would be "no disruption" to patient care.
The partnership between Adventist Midwest Health and Ascension's Alexian Brothers Health System was expanded in 2018, when 10 Presence Health hospitals joined Ascension.
Amita is one of Illinois' largest healthcare systems, with 15 acute care and four specialty hospitals. AdventHealth's four area hospitals and related healthcare facilities will continue to be controlled by AdventHealth.
Amita Health president and CEO Keith Parrott will lead the Ascension hospitals in Illinois, while the current executive vice president and chief operating officer at Amita, Thor Thordarson, will lead the AdventHealth hospitals in Illinois.
Unwinding would allow both healthcare providers to better meet the "changing needs and expectations" of their respective patients in a "rapidly evolving" healthcare market, the companies said.
Nationally, Ascension runs 142 hospitals across 19 states and Washington, while AdventHealth operates facilities within nine states across the United States, including nearly 50 hospitals.
WHY THIS MATTERS
It's rare news to have providers decoupling.
It comes in the midst of a continued consolidation of healthcare providers as hospitals look for strategic partners to battle the financial impacts of the pandemic and spiraling healthcare costs.
THE LARGER TREND
Smaller providers, which have felt the pandemic exact a toll on their financial performance, will likely pursue merger and acquisition strategies to gain access to clinical, strategic and financial resources, according to an April report from Moody's Investors Service.
A Kaufman Hall report released earlier this month noted that M&A activity in the third quarter of 2021 totaled seven transactions involving 20 hospitals, with total transacted revenue for the quarter topping $5 billion.
"Health systems increasingly seek a transformative impact from M&A activity – not just the acquisition of another facility, but the addition of new capabilities or access to new markets," the report said.
ON THE RECORD
"AdventHealth and Ascension will begin the process of unwinding the partnership in a way that best serves the needs of the community," a statement from both companies said. "AdventHealth and Ascension maintain a strong relationship and are united in ensuring the residents of Chicago have access to the best possible healthcare."
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