The proposed merger between Advocate Aurora Health and Atrium Health cleared a key roadblock by receiving approval from a key state agency on Monday.
The combined organization will have 66 hospitals—40 from Charlotte, North Carolina-based Atrium and 26 from Advocate Aurora, which are jointly based 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 initially objected that Advocate Aurora’s application for a mandatory change of ownership waiver lacked detailed information about control interests of the merged company, but the council withdraw soon and give partners time to provide additional information.
“Securing Illinois Health Facility and Services Review Board approval takes us one step closer to partnering with Atrium Health, which will allow us to improve patients’ lives, health and well-being. community health and opportunities for our team members. We look for imminent closures, which we anticipate before the end of the year,” an Advocate Aurora spokesperson said in a statement.
However, the companies are still unable to proceed with the deal until regulatory reviews from other agencies are completed. The Federal Trade Commission did not respond to requests for 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 unanimously voted to waive the merger permit, but some remain skeptical. “My main concern is who has control over the consolidation and removal of much-needed services in Illinois,” said board member Antoinette Hardy-Waller during a meeting in Bolingbrook, Illinois. Those are questions and concerns that they cannot answer.” Hardy-Waller, a registered nurse and CEO of Leverage Network, an organization that promotes Black representation on corporate boards.
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 later announced the plan to set up a $27 billion health system in May, Advocate Aurora was hit with a federal lawsuit alleging zero-sum contract terms with insurers hindering health care. competition and allows the health system to raise prices. The combined system will span six states and possibly take advantage of market share to force Insurers and employers pay inflated rates, which can lead to higher premiums and out-of-pocket costs.
There is limited data on the impact of mergers between hospitals in different states and the federal government antitrust laws focus on internal mergersthat’s part of the reason why the FTC is often hesitant to challenge cross-market mergers.
