A state board in Illinois initially opposed the deal, but later agreed to consider it. The two systems are seeking approval for a merger that would create a company with $27 billion in annual revenue.
the proposed merger of Atrium Health and Advocate Aurora Health; One of the largest hospital mergers planned in yearsHe had a failure in Illinois.
The Illinois Health Facilities and Services Review Board initially opposed the deal, but later agreed to consider the proposed merger. Chicago Tribune and other Illinois media reported Tuesday. The board said it would allow both systems to provide additional information.
Board approval is an important step for the deal to move forward. Advocate Aurora operates in Illinois — the largest health system in the state — and Wisconsin.
The two organizations initially hoped to complete the deal on September 30, according to media reports, but even if the merger is approved, it may take longer than expected.
Atrium and Advocate Aurora initially announced plans in May to merge and form a system with $27 billion in annual revenue. Federal and state regulators must approve the deal.
In a statement Tuesday afternoon, he said he was surprised by the board’s action but still expected the deal to be approved this year.
“State law requires the review board to approve all exemption applications that employees have completed,” Advocate Aurora said in a statement. “Our application was considered completed last month, so today we are surprised by the delay and we will respond to their questions with the review board. Please know that we continue to work with other relevant regulators and rest assured that our alliance is still on track to close. By the end of the year.”
Atrium Health said Tuesday that the system will continue to work with regulators.
“There are several regulatory bodies that have requested a review of information regarding Atrium Health’s proposed strategic alliance with Advocate Aurora Health. The board in Illinois has indicated that it would like to see additional information, and we will continue to share relevant information.” Atrium Health said in a statement
If the deal is ultimately approved, the combined system will operate more than 1,000 ambulatory sites in six states and 67 hospitals, with more than 148,000 employees.
The systems will be renamed Advocate Health, but the systems will continue to use the Atrium and Advocate Aurora brands in their local markets, he said. The firm is based in Charlotte, N.C., but Systems said the combined system will have a strong presence in Chicago and Milwaukee.
The Federal Trade Commission has moved Block some hospital deals last year. However, the FTC has objected to deals involving health systems that operate hospitals in the same markets.
The proposed Atrium-Advocate Aurora deal would see the two systems operate in different divisions of the company, prompting some analysts to boost the merger. Atrium Health is based in Charlotte, NC and serves North Carolina, South Carolina, Georgia and Alabama, while Advocate Aurora serves Illinois and Wisconsin.
If the agreement is accepted, Analysts say it could encourage other health systems to follow suit.. Systems may seek partners in other markets to gain scale and volume, avoiding regulatory oversight involving agreements between competitors in the same markets.
Some critics objected to the deal, saying it would result in higher costs for patients.
SEIU Healthcare, which represents more than 90,000 unionized workers in the Midwest, said in August He opposed the agreement. The union said it wants assurances that hospitals in the Chicago area will not close to protect profits.
“SEIU Healthcare advocates that the Aurora Health-Atrium Health merger threatens affordable health care throughout Chicagoland and medically underserved communities,” the union said in an Aug. 24 letter to the Illinois board.
North Carolina State Treasurer Dale Falwell said in May that the Atrium-Advocate Aurora deal was an “ill-advised merger” and urged federal and state officials to take a closer look.
“North Carolina, one of the nation’s top five metropolitan markets with the highest healthcare concentration, is no stranger to the negative effects of consolidation,” Folwell said in his comments. press release. “Research consistently shows that mergers and acquisitions do not deliver on the promises hospital executives make, but instead result in higher costs, reduced access, and the same or lower standard of care.
In announcing the merger, Atrium and Advocate Aurora pledged to invest significantly in improving care for underserved communities. Alliance leaders have pledged $5 billion to address health equity and other societal needs.
There have been a few hospital deals nationwide over the past year. In the year Only 49 hospital consolidations have taken place in 2021.down from 79 last year. Twenty-five hospital deals have been announced in the first six months of 2022, according to consulting firm Kaufman Hall.
While the offers have been few and far between lately, The transactions have become biggerAnd Kaufman Hall said it may be a trend for the moment.
About two weeks ago Michigan-based Trinity Health has completed the acquisition of Iowa-based MercyOneIt is a $3 billion revenue system. Trinity co-founded MercyOne with CommonSpirit Health, but reached an agreement in the spring to buy all of MercyOne’s assets.
Analysts project The speed of the hospital to finally takeHowever, the possibility of an economic downturn and recession could complicate the deal.
Michael Abrams, managing partner of Numeroff & Associates, a consulting firm, is an outspoken critic of hospital mergers. In an interview in July Chief Health Care ExecutiveHe said he is concerned that if regulators approve the Atrium-Advocate Aurora deal, it could lead to more consolidation between large health systems. He’s hoping the FTC will challenge the deal, but it’s doubtful that will happen because the systems aren’t in overlapping markets.
“If this doesn’t result in pushback from the FTC, ultimately this will open the door to a series of mega-mergers that are carefully designed to avoid overlapping markets,” Abrams said in July.
This story has been updated with statements from Atrium Health and Advocate Aurora Health.