Froedtert Health to buy out Ascension's stake in jointly owned Wisconsin health plan

Froedtert Health is buying out Ascension’s 50% stake in a Wisconsin health plan jointly run by the nonprofit health systems, the former announced this week.

The plan, Network Health, offers commercial and Medicare health insurance plans across 23 of the state’s counties. It currently serves more than 117,000 members, which the systems said will not see any disruptions in coverage as a result of the deal.

“The opportunity to acquire 100% ownership of Network Health is consistent with our mission to advance the health of the people of the diverse communities we serve through exceptional care enhanced by innovation and discovery,” Cathy Jacobson, president and CEO of Milwaukee-based Froedtert Health, said in a statement. “As a proven health insurance plan that consistently receives top ratings from the Centers for Medicare and Medicaid Services, we’re confident this investment will complement our robust population health strategy, allowing us to care for more people at the right place and at the right time.”

Financial terms of the deal were not disclosed. The organizations also held off on setting a specific window for the sale’s close, which they said would be contingent on regulatory review and approval.

Ascension Wisconsin—the 17-hospital subsidiary system of St. Louis-based Ascension that controlled the stake in Network Health—plans to extend its provider agreement and remain in-network for members following the deal’s close, according to the announcement.

Network Health was founded in 1982, though Froedtert didn’t buy in until 2014 when it spent almost $108 million for its stake.

Word of the remaining half’s purchase comes just a month after Froedtert announced it was all-in on a potential merger with fellow nonprofit system ThedaCare, a deal that would yield an 18-hospital, multibillion-dollar organization.

Ascension, meanwhile, can likely use the money it would receive from the sale. The Catholic juggernaut recently reported a nearly $2.7 billion net loss for the fiscal year ended June 30, which it said was driven by a combination of high expenses, “sustained revenue challenges” and a one-time noncash impairment loss of almost $1.5 billion.