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Illinois review board delays approval for $27 billion Advocate Aurora-Atrium merger

by John R. Fischer, Senior Reporter | September 19, 2022
Business Affairs
An Illinois review board says it will consider approving the planned merger between Atrium Health and Advocate Aurora Health at a later date.
The Illinois Health Facilities and Service Review Board is withholding approval of the planned merger between Atrium Health and Advocate Aurora Health, requesting more information on it.

Announced in May, the deal would combine Atrium Health, based in Charlotte, North Carolina, with Advocate Aurora Health, in Downers Grove, Illinois and Milwaukee, Wisconsin, into a $27 billion enterprise called Advocate Health. It requires federal and state regulator approval.

The board voted on September 13 against the deal but then said it would consider it at a later time, according to the Chicago Tribune.

Both organizations were aiming to complete the agreement by September 30, but the delay could push this back, even if it is approved.

"State statute requires the review board to approve all Certificate of Exemption applications that staff have deemed complete. Our application was deemed complete last month, thus, we were surprised by today’s delay and will work with the review board to address their questions,” said Advocate Aurora said in a statement.

Atrium Health also said that it would “continue to share appropriate information" with the board.

The merged system would operate 67 hospitals with more than 1,000 ambulatory sites in six states and over 148,000 employees.

Advocate Aurora Health is the largest healthcare provider in Illinois and also serves patients in Wisconsin. Atrium Health serves North Carolina, South Carolina, Georgia and Alabama. The new organization would be based in Charlotte but maintain a strong presence in Chicago and Milwaukee.

Opponents worry that the deal will increase costs for patients. North Carolina State Treasurer Dale Folwell in May called it an “ill-advised” combination. “Research consistently shows mergers and acquisitions do not deliver on hospital executives’ promises, but instead trigger higher costs, reduced access and the same or lower level of care,” he said in a statement.

While the Federal Trade Commission has blocked several hospital deals in the last year, the Advocate Aurora-Atrium deal stands out because the health systems already operate in different markets and would continue to do so if the agreement goes through, according to Chief Healthcare Executive.

Because of this, analysts project the merger will win federal approval and in doing so, potentially influence other health systems to seek partners in other areas to avoid regulatory scrutiny associated with deals between competitors in the same market.

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