Major deal involving Atrium Health pending Illinois vote | Charlotte Observer

Atrium Health’s mega deal is back on track.

An Illinois health board voted unanimously Monday to approve an application related to plans to combine health care giant Atrium Health with Illinois- and Wisconsin-based hospital system Advocate Aurora Health. But other key regulatory hurdles still loom.

The deal would create the fifth largest health system in the country, Atrium CEO Gene Woods has said. Those plans encountered an unexpected stumble in September.

The Illinois board examining the deal voted first to reject the application and then later decided to postpone a vote. Illinois Health Facilities and Services Review Board members wanted more information at the time on how the deal was structured and how it would proceed operationally, according to one attorney at the meeting.

During a special board meeting held in Bolingbrook, Illinois Monday afternoon — and livestreamed to the public — the board voted 6-0 in favor of a Certificate of Exemption relating to the deal with Atrium.

The board heard public comment from one doctor who spoke in favor of the deal. Michael Grebe, Advocate Aurora’s chief legal officer, also gave brief remarks.

Board members expressed frustrations that they didn’t have adequate information at their last meeting, mostly relating to the ownership structure and who would have control over decisions to establish, consolidate or eliminate care in certain Illinois hospitals.

The board considers applications for construction or expansion of health care facilities “to avoid unnecessary duplication” and promotes new facilities where needed, according to its website.

Monday’s vote was on a Certificate of Exemption, which deals with a change in ownership percentage or operational control. Generally, health care systems need to demonstrate the need to build a new health care facility.

Illinois state law sheds some light on how the board votes on these applications. The board must approve applications for exemptions that it determines are in compliance with a long set of requirements, according to the statute.

The board’s approval Monday brings Advocate Aurora Health one step closer to come together with Atrium, Advocate Aurora said in a statement to The Charlotte Observer immediately following the vote.

Advocate Aurora is anticipating the deal to close before the end of the year.

Big hospital deal scrutinized

The Atrium and Advocate Aurora Health deal — labeled a strategic combination — was announced in May, as the Charlotte healthcare giant set its sights on national growth.

If approved, the new system would be headquartered in Charlotte, with a combined revenue of $27 billion. It would operate under the Advocate Health name, with the Advocate, Aurora and Atrium Health brands used locally.

The deal has not gone without scrutiny.

It could lead to higher prices, suppressed wages for nurses and physicians and more expensive national insurance plans, hospital consolidation critic and Duke Law School professor Barak Richman told The Charlotte Observer at the time the deal was announced.

Service Employees International Union Healthcare in Illinois, a union of more than 90,000 healthcare and human service workers, wrote in a letter that the Atrium and Advocate Aurora consolidation would lead to increased prices and the same or worse care for patients.

Atrium has defended the deal, saying the new combination will create more jobs and opportunities for innovation, the Observer has reported. Together, the combined system has nearly 150,000 employees, according to Atrium.

The organizations pledged to create more than 20,000 jobs across the communities they serve, but they did not detail how to achieve that.

Woods has also said the Atrium and Advocate Aurora have a track record of driving savings by making the systems more efficient.

Regulators watching

A number of regulatory bodies have asked for information regarding the Atrium-Advocate Aurora deal, Atrium Health spokesman Dan Fogleman has told the Observer.

Atrium is anticipating the finalization of a review from the Federal Trade Commission later this year.

In September, Advocate Aurora said it will continue to work with the board and other regulators to address questions. The health system remained confident the combination with Atrium was on track to close by the end of the year.

Board member frustrations

The structure of the deal to combine the two systems was not detailed at the time of the Illinois board’s September session, board member Sandra Martell said at Monday’s meeting.

Members also did not have enough information on the fair market value of assets to be transferred and the anticipated potential cost savings for communities impacted under the change of ownership, Martell said.

This story was originally published November 14, 2022 at 5:07 PM.