Dean Health System to Join SSM

SSM Health Care and physician-owned for-profit Dean Health Systems announced jointly on Tuesday that they have signed an agreement to make Dean and its subsidiaries part of SSM.

SSM President/CEO William P. Thompson calls the deal "the next natural step in the evolution of our relationship and one that holds a lot of promise for both organizations."
The two providers have a long history of collaboration in Wisconsin with shared initiatives around value-based care and a jointly owned health plan.

"We want to take the capabilities that Dean has demonstrated in the relationships we have developed with them here in Wisconsin and transfer those through the rest of SSM," Thompson said.

"It brings together the two organizations that have been working together collaboratively for over 100 years so it doesn't really expand our footprint as much as it creates a new relationship between our two organizations."

The deal is expected to be finalized this summer, pending approval by Dean shareholders and federal and Wisconsin state regulators. Financial terms of the deal were not disclosed.

Craig Samitt, MD, president/CEO of Madison-based Dean, says the two organizations have built a national reputation for quality and that the move would create one of the most significant integrated delivery networks in the country.

"Dean and SSM have had a long successful tradition of 100 years of innovating and being one of the few organizations that pursued the value-based model long before the rest of the market moved in that direction," Samitt said.

The two companies already share an integrated delivery network that focuses population health in south central Wisconsin. Dean manages physician practices and SSM leverages geographic breadth and expertise in acute care. SSM and Dean jointly own Dean Health Plan, which covers more than 300,000 lives in the region.

"We thought if we have accomplished as much as we have as a virtually integrated system, imagine what we can do as a vertically integrated one," Samitt said. "We had discussions with SSM. We found that of all the parties we were speaking with, SSM was the best cultural strategic financial and operational fit for our system."

St. Louis-based SSM is one of the nation's largest Catholic health systems with more than 7,000 physicians and 25,800 employees operating in Wisconsin, Oklahoma, Illinois and Missouri. Dean's multispecialty system includes more than 500 physicians operating within a network of more than 60 clinics, the Davis Duehr Dean eye care, and Dean Pharmacy.

"By having an integrated system, we have concentrated on better care at a lower cost long before the Affordable Care Act was passed and accountable care came into vogue," Samitt said.

"We've made many innovations in our system really aimed at proving that a single organization can be highest in quality and lowest in cost at the same time. Our results demonstrate our success, ranging from Dean's status from the Wisconsin collaborative for healthcare quality. We are second in the state in a very high quality state; likewise SSM Wisconsin hospitals in their own quality measurement portfolios and as well in costs. As one of [the Centers for Medicare & Medicaid Services] ACOs… our average total cost of care is nearly 25% lower than the national average of ACOs. We see that as one of the best possible definitions of better care at a lower cost."

Adam C. Powell, a healthcare economist and president of Boston-based consultants Payer+Provider Syndicate, says news of the merger is not surprising.

"SSM Health Care and Dean Health Systems are not strangers, and have been discussing a merger for over a year," Powell wrote in an email exchange. "Dean and SSM have been partners for a century and have existing ties. SSM Health Care already owns about half of Dean Health Plan and a small stake in Dean Health Systems."

"What makes this deal interesting is that it appears to also be a for-profit to non-profit conversion. Dean will go from being a physician-owned for-profit to a subsidiary of a non-profit. Furthermore, SSM is Catholic, while Dean is not. As we have seen a recent wave of de-Catholization and for-profitization, this is a noteworthy counterexample," Powell said.

"Given the broader geographic scope of SSM Health Care, this merger should enable SSM to widely employ Dean's competencies at physician practice management. Many hospital systems are forming tighter linkages with physician practices in order to be able to more effectively manage costs and deliver high-value care," he said.

"This merger has the potential to give SSM Health Care greater ability to acquire and manage physician practices both in Wisconsin and throughout the Midwest."