The proposed merger between Advocate Aurora Health and Atrium Health passed a key hurdle on Monday, receiving approval from a major state agency.
The combined organization will have 67 hospitals—40 from Charlotte, North Carolina-based Atrium and 27 from Advocate Aurora, with joint headquarters in Downers Grove, Illinois, and Milwaukee—and nearly 150,000 employees in Alabama, Georgia, Illinois , North Carolina, South Carolina and Wisconsin.
The Illinois Health Facilities and Services Review Board entered into the agreement after an initial rejection in September, which delayed the companies’ plans to complete the transaction that month. Board members objected that Advocate Aurora’s application for an exemption from the required change of ownership lacked detailed information about the controlling interest of the merged company. But the panel soon withdrew and gave the partners time to provide more information.
“Securing approval from the Illinois Health Facility and Services Review Board takes us one step further towards partnering with Atrium Health, which will enable us to improve the lives of our patients. , the health of our communities, and opportunities for our team members.
However, the companies are still unable to proceed with the agreement until regulatory reviews from other agencies are completed. The Federal Trade Commission did not respond to requests about the status of its investigation. The office of North Carolina Attorney General Josh Stein (D) said the review was ongoing and there was no information to share. Illinois Attorney General Kwame Raoul (D)’s office declined to comment.
Illinois board members voted unanimously to approve the waiver allowing the merger, but some remained skeptical.
“My primary concern is who has control over the consolidation and removal of much-needed services in Illinois,” board member Antoinette Hardy-Waller said during a meeting in Bolingbrook, Illinois. “Those are questions and concerns they can’t answer,” said Hardy-Waller, a registered nurse and CEO of Leverage Network, an organization that promotes human representation. black on the corporate board.
According to the review board staff report, health systems “confirm that no proposed long-term changes to the range of services currently provided at 10 facilities are expected to occur.” within 24 months of this transaction.”
The proposed board of directors of the merging company will be divided equally between members from the two companies. Atrium Health CEO Eugene Woods and Advocate Aurora CEO Jim Skogsbergh will serve as Co-CEOs for the first 18 months, after which Skogsbergh will retire.
Two weeks after announcing plans to create a $27 billion health system in May, Advocate Aurora was hit with a federal lawsuit alleging zero-sum contract terms with companies. Insurers hinder competition and allow the health system to raise prices. The combined system would span six states and could leverage market share to force insurers and employers to pay inflated prices, which could lead to higher premiums and higher costs. self-pay fees.
Limited data exist on the impact of mergers between hospitals in different states, and federal antitrust laws focus on mergers within states, which is part of why the FTC often hesitant to challenge mergers between markets.
Correction: An earlier version of this article misrepresented the number of hospitals where Advocate Aurora Health operates.
