Advocate Aurora Health and
Beaumont Health have called off their merger discussions.
The decision to end discussions comes five months after Milwaukee- and Downers Grove, Illinois-based Advocate Aurora and Southfield, Michigan-based Beaumont announced they
signed a non-binding letter of intent for a potential partnership.
The health systems said they began discussions at the end of 2019, but paused talks during the COVID-19 crisis.
“We have great respect for Beaumont Health, and we continue to believe scale will play a critical role in advancing quality, accelerating transformation and reducing cost in the health care world of tomorrow," said Jim Skogsbergh, president and chief executive officer of Advocate Aurora Health.
The deal could have expanded Advocate Aurora’s presence across the Upper Midwest. Its current territory includes more than 500 facilities stretching from north of Green Bay to downstate Illinois. Beaumont, which is Michigan’s largest health system, consists of eight hospitals and 145 outpatient sites, and reported total annual net patient revenue of $4.7 billion in 2019. Advocate Aurora reported $10.7 billion in patient revenue, and $12.8 billion in total revenue last year.
“We continue to have a very high regard for Advocate Aurora Health,” said John Fox, president and chief executive officer of Beaumont Health. “But at this time, we want to focus on our local market priorities and the physicians, nurses and staff who provide compassionate, extraordinary care every day.”
Beaumont was previously in talks to merge with Akron, Ohio-based Summa Health, but announced on May 29 that they had ended their partnership plans. The two organizations had been working for more than a year on the partnership, signed a definitive agreement in December 2019 and received all necessary state and federal regulatory approvals before calling it off.
Growing through mergers and acquisitions is part of Advocate Aurora's strategy as it aims to
increase its total revenue to $27 billion over the next five years.
In a separate deal, Advocate Aurora is seeking to acquire a portion of one of the state’s largest HMOs, Sauk City-based
Quartz Health Insurance. Documents filed with the Wisconsin Office of the Commissioner of Insurance don't disclose how much of an ownership stake the health system would have when the entire deal is completed. Advocate Aurora and Quartz, which is co-owned by Gundersen Health System, UW Health and UnityPoint Health – Meriter, announced earlier this year plans to collaborate on a Medicare Advantage plan for seniors, but OCI documents indicate health system is seeking
to do a larger transaction that would happen in three steps. An OCI hearing for that deal is scheduled for Oct. 12.
