Advocate Aurora Health and Beaumont Health have been exploring a potential partnership. Following approval last week by the Boards of Directors, today both organizations signed a non-binding letter of intent that paves the way to deeper discussions to create a leading health care system that would span across Michigan, Wisconsin and Illinois.
“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, 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.”
Executive leadership from both organizations say that while talks are in early stages, the partnership under exploration would allow both not-for-profit health providers to strengthen and align their purposes of serving the needs of individuals, families and communities throughout the Upper Midwest.
“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, Advocate Aurora Health.
Advocate Aurora and Beaumont began discussions at the end of 2019. However, partnership talks paused to allow both organizations to focus on COVID-19.
As a first step in their renewed discussions, the organizations agreed to an equal one-third governance representation of any future partnership between Beaumont and legacy Advocate Health Care and Aurora Health Care organizations, which merged in 2018 to create Advocate Aurora Health.
Both systems will work closely with state and regulatory agencies throughout the process, which began with notifications to all three Attorneys General earlier this week.
About Beaumont Health
Beaumont Health is Michigan’s largest health care system and is most preferred for health care in Southeast Michigan, according to NRC Health survey data. The not-for-profit organization was created to provide patients with greater access to compassionate, extraordinary care, every day. Beaumont Health has a total annual net patient revenue of $4.7 billion and consists of eight hospitals with 3,429 beds, 145 outpatient sites, nearly 5,000 affiliated physicians and 38,000 employees, including 11,000 nurses. 3,500 volunteers help support the organization. In 2018, Beaumont Health had about 178,000 inpatient discharges, 18,000 births and 573,000 emergency visits.
About Advocate Aurora Health
Advocate Aurora Health is one of the 10 largest not-for-profit, integrated health systems in the United States and a leading employer in the Midwest with more than 70,000 employees, including more than 22,000 nurses and the region’s largest employed medical staff and home health organization. A national leader in clinical innovation, health outcomes, consumer experience and value-based care, the system serves nearly 3 million patients annually in Illinois and Wisconsin across more than 500 sites of care. Advocate Aurora is engaged in hundreds of clinical trials and research studies and is nationally recognized for its expertise in cardiology, neurosciences, oncology and pediatrics. The organization contributed $2.1 billion in charitable care and services to its communities in 2018. We help people live well.
Neither Advocate Aurora nor Beaumont has agreed to assume any liability for or otherwise guarantee the other party’s debt as part of the transaction; however, the parties will evaluate optimal credit structure alternatives and whether the refinancing of all or a portion of the existing debt could be considered beneficial to the combined organizations. Any refinancing would be dependent on market conditions, management considerations and other factors. There can be no assurance that any Advocate Aurora debt or Beaumont debt will be refinanced in connection with the transaction. This notice is not made by Advocate Aurora and Beaumont in connection with a purchase or sale of bonds and accordingly is not intended to contain all information material to a decision to purchase or sell bonds.