Froedtert Health and ThedaCare announced that they have completed their merger agreement. The merged system will operate 18 hospitals.
About eight months after announcing plans to merge, Froedtert Health and ThedaCare are about to join forces.
The two Wisconsin hospital systems said this week that they have completed their final agreement and will move forward as one organization beginning Jan. 1. The merged system will operate 18 hospitals and have combined revenue of more than $4 billion.
The deal is one of the larger hospital transactions of the year, and is also a sign of the increased merger activity in the hospital space in 2023.
The brands of both systems will continue, leaders said. The merged system will move forward with a leadership plan in place.
Beginning in January, Cathy Jacobson, president and CEO of Froedtert Health, will serve as CEO of the merged organization. ThedaCare President and CEO Imran A. Andrabi will serve as president.
After a six-month transition period, Jacobson plans to retire and Andrabi will become CEO of the merged organization.
Both leaders celebrated the completion of the deal.
“After months of thoughtful work, we’re excited for this journey to begin as a combined health system,” Jacobson said in a statement. “This is an important and exciting moment for Wisconsin.”
“We are confident our combined health system will continue to improve health and well-being for everyone we are privileged to serve, in line with our longstanding commitment to our communities,” Andrabi said in a statement. “This is just the beginning of an inspired future for health care in Wisconsin.”
Froedtert, based in Milwaukee, operates 10 hospitals and partners with the Medical College of Wisconsin to provide healthcare services. ThedaCare, which operates eight hospitals, serves northeast and central Wisconsin.
Both Jacobson and Andrabi touted the potential to expand healthcare services for communities across Wisconsin. They said they are especially focused on providing more care and outreach to underserved communities and said health equity is one of the top goals for the combined system.
The CEOs of Froedtert and ThedaCare spoke about the merger with Chief Healthcare Executive® in September. They shared similar hopes of offering better care to Wisconsin residents, and they said their shared values played a key part in reaching a definitive agreement in a relatively short time.
“We are tremendously lucky to have two organizations that have such congruence on some of these subjects that can become really sticky,” Andrabi says.
Jacobson told Chief Healthcare Executive that it’s a combination of “two very strong organizations,” as opposed to a strong system looking to merge with a provider that’s struggling to keep the doors open.
“This isn't a turnaround,” Jacobson said in September. “This isn't being done for financial reasons. It's not being done for financial consideration reasons. So your focus is in different areas. So we put our attention on what we're trying to do, not necessarily what might be a rote transaction map. And I think that helped us align our resources a lot to get this done.” (See part of our conversation with Cathy Jacobson and Imran A. Andrabi in this video.)
The merged system plans to name its board of directors in January 2024. Officials previously said the initial board chair will be Jud Snyder, who is the chairman of Froedtert’s board. Jim Kotek, ThedaCare’s board chairman, will serve as vice chair of the combined organization. The board’s committees will have equal representation of members of Froedtert and ThedaCare.
Froedtert and ThedaCare said work will continue throughout 2024 to determine how the newly merged organization will operate.
Jacobson said in September that the board will be focused on improving healthcare across all communities.
“It's one of our success metrics that we have that we're going to be accountable to our board for going forward,” Jacobson says.
Andrabi told Chief Healthcare Executive in September that he expects clinicians from the two systems will share insights.
“Now we can learn from each other and, and hopefully, be even better at doing it,” he says.