Advocate-Aurora merger would create 10th largest nonprofit health system in US

Joanna Estrada
December 6, 2017

On Monday, Aurora Health Care, Wisconsin's largest health care system, announced plans to unite with Advocate Health Care of Chicago, the largest health care provider in IL. The Board of Directors for the new system will be comprised equally of Advocate and Aurora members.

The combined system, called Advocate Aurora Health, would include 27 hospitals, have annual revenues of approximately $11 billion and serve almost 3 million patients each year. It was relayed to physicians, nurses, associates and caregivers in both organizations Monday. Since the Tenet-Vanguard merger in 2013, a $4.3 billion acquisition, large-scale mergers between health systems have become routine to keep pace with an increasingly competitive and consolidated industry.

Advocate Health Care is the largest health system in IL. Chou says healthcare companies ultimately aim to mirror the "classic Kaiser model", referencing industry giant Kaiser Permanente of Oakland, California. The system's combined annual revenue is expected to total approximately $11 billion, the systems said.

But Advocate President and CEO Jim Skogsbergh told the Tribune that prices for IL patients would not rise due to the merger with Aurora, pointing to the presence of Blue Cross and Blue Shield of IL.

The federal government successfully prevented Advocate from joining with NorthShore University Health System on the grounds that a merged system would wield too much power in the Chicago hospital space, pushing up costs and removing options for patients.

The Advocate-Aurora deal will be subject to similar state and federal regulatory approval. The two systems already have an established relationship, according to the announcement, as for 20 years they have jointly owned and operated ACL Laboratories.

"For the communities in IL and Wisconsin that we serve and for our two organizations, this is an unprecedented opportunity to shape our future and better serve patients", said Nick Turkal, M.D., president and chief executive officer of Aurora. Aurora Board Chair Joanne Disch will chair the Advocate Aurora Health Board of Directors during its first year of operation. The two companies say they expect to close the deal by mid-2018. At the top would be Skogsbergh and Nick Turkal, MD, Aurora's president and CEO, acting as co-CEOs of the combined company. Each system will maintain its current headquarters.

Other reports by Click Lancashire

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