Earlier this week, Wauwatosa-based
Froedtert Health and Neenah-based
ThedaCare announced they have signed a letter of intent to
come together as one organization.
After the merger is complete,
Cathy Jacobson, Froedtert’s president and chief executive officer, will initially assume the role of CEO.
Dr. Imran Andrabi, ThedaCare president and CEO, will serve as president. After a six-month transition period following the merger, Jacobson will retire from the organization.
BizTimes Media reporter Ashley Smart spoke with Jacobson about how and why the deal came together, how the merger will benefit rural communities, her plans to soon retire, and how both organizations hope to transform health care in the state.
In what ways does this Froedtert and ThedaCare merger make sense for both organizations?
“It was actually October of 2022 when we announced our quaternary agreement and then our joint venture development in Oshkosh and Fond du Lac. At that time, we’d been meeting with ThedaCare for over a year just in terms of opportunities and we worked on those ideas. As we got a chance to know each other through those conversations, what we recognized was that our conversations were very easy in terms of being able to come to an agreement because we were aligned on so many thoughts. It wasn’t just about academic medicine, which is incredibly important, or it wasn’t just about expansion. What we really aligned around was, number one, a joint vision for how we think health care needs to change. We’re both organizations who have in our vision statements the fact that we need to change and transform health care. So, when you have an aligned view about what you need to do and then you start looking at how you do it, so many similarities came about. We are deeply rooted, community-based organizations. We continued the conversation and then we got our boards involved, probably around January (2023)."
What does transform health care mean to both organizations?
“I think first and foremost it’s recognition that health care doesn’t work for most people today. What I mean by that is you may have access to health care, but maybe you have to wait too long for an appointment, or it’s too clunky for you to schedule, or you don’t understand how to navigate the system. So, maybe once you get in you get great care, but the experiences and the handoffs and the communication and all those types of things are not where they need to be. Transform means recognizing what we do today is not what people want it to be and not what it needs to be. Then, when you’re in that mindset, you’re immediately thinking of those things that we need to challenge. Transform means how do we actually become more digitally enabled like every other service that patients are used to having and how do you bring that to health care? These are things that our patients are telling us are broken today. Transforming means listening to them, not necessarily thinking about the way we’ve traditionally done health care. That’s just one example. How do we also enable our providers and staff to actually spend more time with their patients as opposed to more time with their computers? Those are the types of things.”
How does this merger benefit more rural communities served by ThedaCare?
“You can’t deliver health care in a rural setting the same way that you do in Appleton or Milwaukee because there just isn’t the same access to brick and mortar locations. People are on a different schedule, their lives revolve around different things than people in the city, so first and foremost it’s about listening to the community and how health care has worked for them and then (asking) what tools we can bring. Is it virtual health? Well, we know that there’s broadband issues still in some of our rural areas. How do we help bring that to them? How do we connect them to the best of academic medicine? Frankly, without having your primary care doctor or your whole health system be able to navigate that for you, it’s kind of a big mystery of trying to figure out how to get down to Milwaukee if a person is really ill. We’re really hoping to create that frictionless handoff so that a ThedaCare provider on the ground can know they have a colleague they can access.”
Is this truly a merger or is it an acquisition?
“My legal counsel would tell you it’s neither. That is why we’re actually calling it a combination. In not-for-profit health care, you literally can take two organizations and just put them together. And that is exactly what we’re doing here. There’s no money exchanged, we’re just taking all of the resources of ThedaCare, all the resources of Froedtert Health, and putting them together into a combined organization. Really, what tells you about how the organization will be run in the future is the governance statement that we put out, which is really the board.”
How did you make the decision retire following the merger?
“I’m not retiring for 15 months. There’s a long trajectory yet. It’s probably another nine months -- until the end of the year -- until we close the transaction. We’re still Froedtert Health and ThedaCare and we have to continue to do the same things we do every day. Once we’re combined, there will be a six-month transition period where we really can bring the organizations together and I will leave. My decision on this has been building. Most people who know me know that I’ve never had the intent to work all the way to 65. I’m involved in a number of different things, health care and non-health care related, on a national level and I wanted to do something else eventually. When you feel good about how you can hand off your organization and really create an opportunity and you meet a leader that is aligned with you in terms of your vision, you kind of marry the two things up together. To be transparent, I’m 60, so I’m not that far off (from 65). It’s not that far off from my original long-term thinking. It’s just a natural transition.”
Are you able to share what other things you plan to do after retirement?
“I’m on a couple of different boards already and I have to do that in my spare time on top of my normal job. I want to stay on those boards and maybe look at some other opportunities as well – nothing beyond what I’m doing already. I want to do that and spend some more time with my family.”
Following approval of the merger, will the organization pursue further acquisitions?
“I really can’t say right now. We’ve got to stay focused on the one (deal) we have right now. I will tell you we think we are creating something unique in the state in terms of being Wisconsin based and Wisconsin led, and we hope once we get it put together that it is something that attracts partners who want to join us and the work we’re doing. We are building something for the future we hope others will see as attractive.”
Are there any worries about getting regulatory approval?
“I would say we’re in an environment where health care combinations are really scrutinized and we just have to be extraordinarily respectful of that. At the same time, we think we’re bringing two health systems together that don’t really overlap. The only sharing of patients we have are the patients that get referred out of ThedaCare’s geography to come down and access complex care they can’t normally get. We think that is actually the strength of our merger. We’re optimistic and think we’re doing this for the right reasons.”
When were employees notified of the merger?
“We started telling everyone first thing this morning (April 11). We started telling our teams probably about an hour before the press conference. We were very careful with our messages because first and foremost, we need all of our staff to come take care of patients every single day. That’s what we want them focused on right now. The messages were nothing’s changing, even when we come together and combine."
When might we know the company’s new name and headquarters?
“I can tell you for sure the headquarters will be in Wisconsin. That’s quite frankly becoming more unique among health care systems. We really, really have not talked about plans beyond that. In terms of the name, we decided both names will live on. There’s a very strong legacy in ThedaCare, which has been around for over 100 years. We’re very proud of Froedtert. We know we’ll figure something out that people understand.”
