Froedtert Health and ThedaCare's cross-market merger has been finalized and will go into effect on Jan. 1, 2024, the Wisconsin-based nonprofits announced this week.
The systems had signed a definitive agreement in September (see below) and were awaiting regulatory approval for their roughly $5.5 billion combination.
“After months of thoughtful work, we’re excited for this journey to begin as a combined health system. This is an important and exciting moment for Wisconsin,” Cathy Jacobson, president and CEO of Froedtert Health, said in the announcement. “As a combined organization, we will continue to strengthen local health care, working closely with the Medical College of Wisconsin.”
As announced previously, Froedtert’s Jacobson will helm the ship as CEO for the first six months before retiring. ThedaCare’s Andrabi will be in the president role during the transition period before succeeding Jacobson as CEO.
While several other leadership positions have already been filled, the systems said they will be naming their new board—which will have representation from both organizations—in January.
Sept. 9, 2023
Wisconsin nonprofits Froedtert Health, ThedaCare moving forward with 18-hospital merger
Froedtert Health and ThedaCare moved closer to consummating their 18-hospital merger this week with the signing of a definitive agreement outlining the terms of their proposed combination, the systems announced Wednesday.
The Wisconsin nonprofits' deal still awaits regulatory approval and other customary pre-closing conditions, though the latest word bumps back the hopeful closing date from late 2023 to "the start of the new year."
“We are excited to continue the process of bringing our locally led health care organizations together, working in concert with the Medical College of Wisconsin,” Cathy Jacobson, president and CEO of Froedtert Health, said in the announcement. “Creating healthier communities throughout Wisconsin will take a lot of work as we move ahead, and we’re excited that we’re one step closer to embarking on this journey.”
The signed agreement broadly reinforces the goals and commitments of April's letter of intent (see below the break).
For instance, governance by a parent board with representation from both organizations and collaboration with the Medical College of Wisconsin. Froedtert and ThedaCare will also retain their existing brand names, according to the announcement, and patients can continue to see their current providers.
“ThedaCare and Froedtert Health have long legacies of investing in their communities. Both organizations are committed to helping Wisconsinites live their best lives, and we believe that the best way to do that is by coming together,” Imran A. Andrabi, M.D., ThedaCare president and CEO, said in the announcement. “We look forward to further defining how we will combine our organizations to make health care better for everyone we are privileged to serve.”
Milwaukee-based Froedtert’s integrated network comprises 10 hospitals, over 2,100 providers and 45 other locations, thanks, in part, to a partnership with the Medical College of Wisconsin. It reported just over $3.4 billion in revenue during the fiscal year ended June 30, 2022.
Neenah, Wisconsin-based ThedaCare spans 17 counties with eight hospitals and over 180 care locations. It employs about 7,000 providers and other workers and delivers care to more than 650,000 residents. The organization saw nearly $1.2 billion in revenue during the fiscal year ended Dec. 31, 2021.
April 11, 2023
As of Tuesday, Froedtert Health and ThedaCare are the latest Midwest health systems to announce cross-market merger plans.
The Wisconsin nonprofits said they have signed a letter of intent to combine and form an 18-hospital system. Should their due diligence and regulatory approvals pan out, the partners said they hope to put together a definitive agreement and then launch the combined health system before the end of the calendar year.
“Our Wisconsin roots have been instrumental in building creative solutions to meet our communities’ health needs,” Cathy Jacobson, president and CEO of Froedtert Health, said in the announcement. “By coming together with the state’s leader in regional community health, our combined organization will be poised to meaningfully address health equity and disparities, enhance access to a broader array of services and make it easier for patients to navigate the healthcare system.”
Milwaukee-based Froedtert’s integrated network comprises 10 hospitals, over 2,100 providers and 45 other locations, thanks in part to a partnership with the Medical College of Wisconsin. It reported just over $3.4 billion in revenue during the fiscal year ended June 30, 2022.
Neenah, Wisconsin-based ThedaCare spans 17 counties with eight hospitals and over 180 care locations. It employs about 7,000 providers and other workers and delivers care to more than 650,000 residents. The organization saw nearly $1.2 billion in revenue during the fiscal year ended Dec. 31, 2021.
Froedtert and ThedaCare’s operations don’t currently overlap, though the pair already have a quaternary care partnership in place alongside the Medical College of Wisconsin that was announced in September. The organizations also have a joint venture in place since October to create two new “health campuses of the future” in Wisconsin’s Fond du Lac and Oshkosh communities.
Both systems have seen their operating revenues dip in recent quarters due to industrywide expense pressures, but said during a Tuesday press conference that the decision was not the result of slipping finances nor competitive pressures. Rather, they said in the announcement that their combination is the “natural next step” toward strengthening their care capabilities and serving patients.
“ThedaCare and Froedtert Health have a commitment to the people of Wisconsin,” Imran Andrabi, M.D., ThedaCare president and CEO, said in a release. “We are alike in many ways, and our leaders and our boards have long been asking how we can accelerate our work to make a positive and lasting impact on our state. We have a shared vision for what we can do together to improve the health and well-being of the communities and be proactive partners in health.”
Of particular note, the organizations said their merger and the continued partnership with the Medical College of Wisconsin would strengthen recruitment and retention efforts at a time when workforce shortages abound.
Should the merger be finalized, Froedtert’s Jacobson will helm the ship as CEO for the first six months before retiring. ThedaCare’s Andrabi would be in the president role during the transition period before succeeding Jacobson as CEO.
The combined organization would have an 18-member board “composed of representatives of both organizations” and initially chaired by Froedtert’s Jud Snyder, according to the announcement.
On the executive side, if the merger is completed, ThedaCare Chief Strategy Officer Thomas Arquilla will step in as chief growth officer, Froedtert Executive Vice President of Finance Scott Hawig will take on the chief financial officer role and ThedaCare Chief Operating Officer and Chief Financial Officer Mark Thompson will serve as chief transformation investment officer. Additionally, Froedtert Chief Business Development Officer David Olson and Froedtert Chief Clinical Officer Ian Schwartz, M.D., would retain their current titles at the new organization.
“Our organizations have a shared commitment to the people of Wisconsin,” Jim Kotek, board chair of ThedaCare’s board of trustees and the tentative initial vice chair of the new organization, said in a release. “That commitment is reflected in our quality of care, community investments and organizational cultures. These tenets will be the bedrock of our successes as we move forward to combine our organizations.”
Froedtert and ThedaCare join a chorus of cross-market health system mergers that have cropped up in recent years. Fellow Milwaukee system Advocate Aurora Health closed a deal in December to join Atrium Health as the $27 billion Advocate Health.
Nearby Michigan also just saw the close of Sparrow Health System and the University of Michigan Health’s $7 billion academic health system merger.
So far, plans for the proposed 58-hospital merger of South Dakota-based Sanford Health and Minnesota-based Fairview Health Services, however, has been gummed up by regulatory reviews.