Advocate Aurora Health and Beaumont Health are exploring a partnership that could lead to a merged health care system spanning Wisconsin, Illinois and Michigan.
Advocate Aurora – which has dual headquarters in Milwaukee and Downers Grove, Illinois – and Beaumont, which is based in Royal Oak, Michigan, have signed a non-binding letter of intent for the potential merger.
The health systems said they began discussions at the end of 2019, but paused talks during the COVID-19 crisis.
“We are excited to explore this option with an organization as highly regarded as Advocate Aurora Health known for their track record in health outcomes, population health and consumer experience,” said John Fox, president and chief executive officer of Beaumont Health. “The potential opportunity to leverage the strength and scale of a regional organization while maintaining a local focus and strong presence in Michigan as a leader and major employer is important to us.”
The health systems have agreed to an equal one-third governance representation of any future partnership among legacy Advocate Health and Aurora Health Care organizations.
The potential merger would continue to grow Advocate Aurora’s presence across the Upper Midwest. Following the merger of Advocate Health and Aurora Health Care in 2018, the combined organization is now among the nation’s largest health systems, with its territory of more than 500 facilities stretching from north of Green Bay to downstate Illinois.
Beaumont is Michigan’s largest health care system, consisting of eight hospitals and 145 outpatient sites.
Advocate Aurora in 2019 reported $10.7 billion in patient revenue, and $12.8 billion in total revenue. Early this year, leaders announced plans to grow its total revenue to $27 billion over the next five years. It has more than 70,000 employees.
Beaumont reported total annual net patient revenue of $4.7 billion, and has 38,000 employees and nearly 5,000 affiliated physicians.
“Beaumont Health has built a strong reputation for clinical excellence, education and research. This is a unique opportunity to explore a partnership with a like-minded, purpose-driven organization,” said Jim Skogsbergh, president and chief executive officer of Advocate Aurora Health.
Beaumont was 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.
