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Decision on Advocate Aurora and Atrium merger delayed

The Illinois Health Facilities & Services Review Board says it received letters of opposition.

Susan Morse, Executive Editor

Jim Skogsbergh, left, president and CEO of Advocate Aurora Health, and Eugene A. Woods, president and CEO of Atrium Health

Photo: Courtesy Advocate Aurora Health

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.

This included the SEIU Healthcare union of 90,000-plus healthcare and human service workers, which sent an Aug. 24 letter opposing the proposed merger. The union cited concerns of reduced quality and increased costs in the Chicago area; out-of-state ownership posing a risk to Illinois facilities and communities they serve; and risk of service reductions by Advocate Aurora.

WHY THIS MATTERS

Advocate Aurora Health and Atrium Health announced their merger plans in May. The organizations want to transition to the new brand, Advocate Health, while using the individual brands in their respective markets.

The new organization would have a combined footprint across Illinois, Wisconsin, North Carolina, South Carolina, Georgia and Alabama. It would serve 5.5 million patients, operate more than 1,000 sites of care and 67 hospitals, employ more than 7,600 physicians and have combined revenues of more than $27 billion.

The new organization is to be headquartered in Charlotte, North Carolina, while continuing to maintain a strong organizational presence in Chicago and Milwaukee, including a new institute for health equity located in Milwaukee.
 
The plan is to have Jim Skogsbergh, president and CEO of Advocate Aurora Health, and Eugene A. Woods, president and CEO of Atrium Health, serve as co-CEOs for the first 18 months, at which point Skogsbergh would retire and Woods would become the sole CEO.

No assets would be transferred as part of the combination, the organizations said. 

THE LARGER TREND

The merger is being touted as combining the clinical expertise of both health systems, including medical research and population health – as well as advanced capabilities in data analytics and digital consumer infrastructure.

The new organization projects to spend $2 billion to address health inequities across both rural and urban underserved communities. It has made a commitment to achieve carbon neutrality by 2030 and a pledge to create more than 20,000 new jobs across the communities the health systems serve.  
  
In 2020, Advocate Aurora Health explored a merger with Beaumont Health to create a $17 billion nonprofit health system across Michigan, Wisconsin and Illinois. But four months after signing a non-binding letter of intent to merge, the systems called off the deal due to the COVID-19 pandemic and concerns raised by physicians and a former Beaumont Health trustee.

In 2018, Advocate Health Care and Aurora Health Care combined to create Advocate Aurora Health.

Twitter: @SusanJMorse
Email the writer: SMorse@himss.org