USA – Advocate Aurora Health and Atrium Health have announced a merger agreement to form a six-state, 67-hospital nonprofit juggernaut with US$27 billion in combined revenues.
According to a joint announcement, the merger plans have been approved by each system’s board of directors and are now subject to regulatory review.
The joint system would serve approximately 5.5 million patients, operate over 1,000 care sites, employ 148,000 people, and provide US$4.8 billion in annual community benefits under the new Advocate Health brand, according to the organizations.
It would also oversee 2.2 million lives through 15 accountable care organizations, four clinically integrated networks, and nearly a half-dozen value-based contracts.
The systems said their merger would result in gains in clinical preeminence and safety, health equity, affordability, learning and discovery, workforce innovations, and environmental sustainability by leveraging each side’s unique expertise and capabilities.
Furthermore, they announced a number of commitments to local communities and sustainability. These include a US$2 billion pledge to address the root causes of rural and urban health disparities, the creation of over 20,000 new jobs, and a commitment to becoming carbon neutral by 2030.
The systems stated that their new organization would be headquartered in Charlotte, North Carolina, and would “maintain a strong organizational presence” in Advocate Aurora Health’s Chicago and Milwaukee markets.
While they intend to transition to the Advocate Health parent brand, the Advocate Aurora and Atrium Health brands will be retained in local markets.
Woods and Advocate Aurora Health President and CEO Jim Skogsbergh will serve as co-CEOs for the first year and a half, after which Skogsbergh will retire and Woods will take over as sole CEO of the system.
New governance
A new board of directors will be formed, with equal representation from each organization’s existing boards.
Atrium Health’s current chair, Edward Brown III, is set to chair the new board until the end of 2023, with Richardson set to serve the following two-year term.
Advocate Aurora, which was formed by the merger of Advocate Health Care and Aurora Health Care in 2018, operates over 500 ambulatory locations and 27 hospitals. In terms of size and finances, the two nonprofits are roughly equal.
It treats 2.6 million unique patients, employs 75,000 people, and has a total revenue of just under US$14.1 billion and a net income of more than US$1.8 billion in 2021.
The system had previously discussed a merger with Beaumont Health, but that plan was scrapped in late 2020.
Atrium Health reports annual revenue of US$13 billion from its 40 hospitals and more than 500 ambulatory locations.
The system also hosts the Wake Forest University School of Medicine, which is slated to remain as the academic core of the pending combined organization following its 2020 merger with Wake Forest Baptist Health.
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