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Analysis

Advocate Aurora, Beaumont Health End Merger Talks

By John Commins  
   October 02, 2020

Five months after signing a non-binding letter of intent, the two health systems said the decision to stop the merger was by mutual agreement.

Advocate Aurora Health and Beaumont Health have ended merger talks, the two health systems announced jointly on Friday morning.

"We continue to have a very high regard for Advocate Aurora Health," John Fox, president and CEO of Beaumont Health, said in a media release. "But at this time, we want to focus on our local market priorities and the physicians, nurses and staff who provide compassionate, extraordinary care every day." 

The merger talks began in late 2019 but were put on hold earlier this year as COVID-19 accelerated across the Midwest. Had the deal be finalized, the merged system would have included 35 hospitals, more than 650 care venues, 108,000 employees and $17 billion in annual revenues, with a presence in three states.

"We have great respect for Beaumont Health, and we continue to believe scale will play a critical role in advancing quality, accelerating transformation and reducing cost in the healthcare world of tomorrow." Advocate Aurora Health CEO and President Jim Skogsbergh said.

The proposed merger was met with growing resistance from physicians and community stakeholders and that opposition appeared to be intensifying. On Thursday, U.S. Rep. Andy Levin, D-MI, whose district includes Beaumont's Royal Oak campus, told Deadline Detroit that he would work to stop the merger.

"I simply do not accept this merger as it is currently proposed and unless I hear some facts to change my mind, I expect to make it stop happening," Levin told the news site.

Friday marks the third time in seven years that Beaumont has entered merger talks, only to see them collapse.

In 2013, a proposed merger with Henry Ford Health System was called off after Henry Ford CEO Nancy Schlichting cited "two very different perspectives (that) had emerged for the new organization between Henry Ford and Beaumont."

In May, Beaumont and Summa Health walked away from merger talks at the height of the coronavirus pandemic, but no reason was given by either health system.

“We continue to have a very high regard for Advocate Aurora Health.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

The merger talks began in late 2019 but were put on hold earlier this year as COVID-19 accelerated across the Midwest.

Had the deal be finalized, the merged system would have included 35 hospitals, more than 650 care venues, 108,000 employees and $17 billion in annual revenues, with a presence in three states.

The proposed merger was met with growing resistance from physicians and community stakeholders and that opposition appeared to be intensifying.


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