Midwest health systems on track to merge

The merger of Gundersen and Bellin comes amid a slowdown in hospital deals that took hold in 2021 and has continued this year. Industry consultants at Kaufman Hall said recent healthcare transactions have tended to focus on combining groups of facilities in concentrated markets, as pandemic disruptions and financial pressures have made it less attractive for acquirers to pursue non-core assets.

An exception is one of the year’s biggest announced deals, the merger of Advocate Aurora Health in the Midwest and Atrium Health in the South. The two regional systems intend to create a 67-hospital operation spanning six states.

Bellin and Gundersen announced June 1 they were in talks toward a merger aimed at strengthening the personal, local medical care for which they are known in their communities.

“Our health systems have been successfully fulfilling our individual missions, but we know we will thrive and best serve our patients and communities by finding partners with shared missions and strategic visions,” said Scott Rathgaber, current Gundersen CEO. Rathgaber will lead the merged organizations as CEO.

John Dykema, chair of the Bellin Health board of directors, will become chair of the newly created board, residing in northeast Wisconsin. Current Bellin CEO Chris Woleske will serve as system executive vice president and president of the Bellin region.

The Bellin and Gundersen names, logos, locations and people will remain the same, the two systems said. Over time, they intend to offer patients a broader network of shared provider expertise and digital health tools to bring virtual care options into homes and workplaces.

Dive brief:

• Two Wisconsin-based hospital operators, Gundersen Health System and Bellin Health, said they expect to complete their previously announced merger on Nov. 30. It is the second merger of Midwest health systems in the spotlight this month, after South Dakota-based Sanford Health and Fairview Health Services in Minneapolis last week announced plans to merge.
• The agreement creates an 11-hospital system with more than 100 local clinics across Wisconsin, Upper Michigan, southeastern Minnesota and northeast Iowa. The nonprofits said they expect the merger to allow them to offer patients access to more resources and a broader network of services that will improve care.
• While they are combining operations, the organizations will retain their current headquarters — Gundersen is based in La Crosse and Bellin in Green Bay — to ensure shared decision-making and equal representation in a “merger of equals,” they said.

Healthcare Dive