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Advocate-Aurora Merger Latest in Healthcare Consolidation Trend

By Jack O'Brien  
   December 05, 2017

Even with the new direction-setting in Washington under President Trump, the FTC’s approach to protecting competition in healthcare is expected to stay the course.

“The only indication so far is that they’re going to continue applying the same model and with the same vigor that we experienced in the last administration,” Field says.

The FTC declined to comment on Advocate’s planned Aurora merger, noting that the commission does not confirm the existence of any investigation.

Dust settling after the announcement

Wilson, the analyst, says effective mega-mergers rely on a significant amount of backend work prior to the announcement. After the plan is unveiled, companies must follow due diligence in meetings with federal and state regulatory authorities to secure approval.

“I think there’s that process of speaking with regulators, going through all of the paperwork and preparing for the actual merger to ensure you have alignment,” Wilson says. “Once you get down to the closing of the deal, [companies] make sure to have their mission, vision and values lined up. It’s a lot of work getting everything ready, speaking with employees and working through best practices.”

The risk of duplication of duties remains at a company with two CEOs, which is an interesting obstacle to face. Chou said he will be interested to see who “calls the shots” after the merger is formalized.

Citing her experience in handling health system mergers and acquisitions, Wilson says “50-50 mergers” are not uncommon. The move to keep two CEOs could be successful since the companies do not compete in the same market, she says.

Another challenge includes how to combine each company’s assets and decide on how to implement practices which provide the best care to patients. Chou advised both companies to focus on fostering a cohesive environment for employees and providing the best care for patients, rather than fixating on the politics of the merger.

Wilson echoed Chou’s sentiments, saying the post-announcement process should be deliberative and ensure employees understand the merger and its effects on the company culture.

HealthLeaders Media editor Steven Porter contributed to this report.

This story was updated to include a response from the FTC.

Jack O'Brien is an associate editor at HealthLeaders. 

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