Froedtert, ThedaCare plan to merge, hope to launch combined health system by end of 2023

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Froedtert Well being and ThedaCare have begun the method of merging their organizations into one, with the objective of launching a mixed well being system by the top of 2023.

The hospital methods introduced Tuesday that they’d signed a letter of intent to mix, and mentioned the merger is geared toward bettering the well being and well-being of their sufferers and communities.

The well being methods say combining into one group will construct on their previous work collectively to shut well being care gaps, recruit and retain workers and develop improvements to satisfy affected person wants.

“Each of our organizations have deep, long-standing ties within the communities we serve. Our Wisconsin roots have been instrumental in constructing inventive options to satisfy our communities’ well being wants,” mentioned Cathy Jacobson, president and CEO of Froedtert Well being, in a press release. “By coming along with the state’s chief in regional neighborhood well being, our mixed group can be poised to meaningfully handle well being fairness and disparities, improve entry to a broader array of providers and make it simpler for sufferers to navigate the well being care system.”

ThedaCare and Froedtert will spend the following a number of months understanding the small print of a definitive settlement that can define the mixed well being system’s commitments, officers mentioned. The mixed group can be ruled by an 18-member board with representatives from each organizations that embrace the presidents of Froedtert and ThedaCare, hospital officers mentioned. 

Jacobson will initially assume the function of CEO of the merged well being system, however plans to retire after a six-month transition interval. In the course of the transition, ThedaCare President and CEO Imran Andrabi, will function president. After Jacobson’s retirement, Andrabi will turn out to be president and CEO of the merged well being care system.

Hospital officers mentioned they have not selected a reputation for the merged well being system, however it’s essential to discover a solution to proceed utilizing their present names as a result of they’re trusted of their native communities.

Froedtert relies in Milwaukee and primarily serves southeast Wisconsin. In the meantime, ThedaCare relies in Neenah and its amenities are primarily positioned in northeast and central Wisconsin.

“ThedaCare and Froedtert Well being have a dedication to the individuals of Wisconsin,” Andrabi mentioned in a press release. “We’re alike in some ways, and our leaders and our boards have lengthy been asking how we are able to speed up our work to make a constructive and lasting influence on our state.”

The introduced Froedtert and ThedaCare merger is the latest in Wisconsin and comes after Gundersen Well being System merged with Bellin Well being, and Advocate Aurora Well being mixed with Atrium Well being in late 2022. Marshfield Clinic Well being System and Essentia well being additionally introduced merger talks final yr.

ThedaCare and Froedtert have labored collectively prior to now. Final October, they introduced a partnership to create micro-hospitals in Fond du Lac and Oshkosh, providing emergency and outpatient providers.

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“We’ve got a shared imaginative and prescient for what we are able to do collectively to enhance the well being and well-being of the communities and be proactive companions in well being. We’re keen to start out exploring how we are able to construct a more healthy, brighter future for Wisconsin,” Andrabi mentioned in a press release.

In October 2022, Jacobson instructed the Milwaukee Enterprise Journal that her well being system had no plans to merge with ThedaCare. Throughout a press convention Tuesday, Jacobson mentioned each organizations acquired to know one another higher since final yr, which is why plans for a merger modified over time.

“We came upon simply how straightforward it was to come back collectively and create these partnerships due to how aligned we actually had been,” she mentioned Tuesday. “And it simply grew to become a pure subsequent step.”

Froedtert reported tens of millions of {dollars} in losses in back-to-back quarters final yr, ending on June 30 and September 30, respectively, the Milwaukee Enterprise Journal reported. Nevertheless, hosptial officers mentioned Tuesday that the merger is not certainly one of necessity.

“We do not want to do that,” Jacobson mentioned. “We wish to do that as a result of we expect it is going to make us higher.”

In December, College of Wisconsin-Madison Economist Alan Sorensen instructed Wisconsin Public Radio that mergers could give hospitals extra leverage in negotiations with insurance coverage corporations.

He mentioned insurance coverage corporations wish to pay as low a value as they’ll negotiate, whereas well being care suppliers wish to receives a commission as a lot as they’ll negotiate.

“These negotiations are enormously essential for the underside strains of those corporations,” Sorensen mentioned on the time. “Quite a lot of instances what’s driving the mergers is that (hospital methods) really feel like in the event that they’re larger, they’re going to do higher in these negotiations, they’re going to have extra bargaining energy, they’re going to be extra indispensable to the insurance coverage firm.”

Even so, John Raymond, president and CEO of the Medical Faculty of Wisconsin, mentioned Tuesday that Froedtert and ThedaCare merging would additional advance high-quality well being care to extra individuals in Wisconsin.

“The Medical Faculty of Wisconsin is each grateful and extremely inspired by this partnership, which can allow all of us working collectively to influence analysis, from early discoveries to medical trials, and to inhabitants well being,” he mentioned in the course of the press convention. “And we’re dedicated to being sturdy allies to those two excellent well being methods as they arrive nearer collectively and merge into one entity.”

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