Two Wisconsin hospital systems move closer to merger

The planned merger of Froedtert Health and ThedaCare has taken another key step.

Cathy Jacobson, president and CEO of Froedtert Health, and Imran A. Andrabi, president and CEO of ThedaCare. The two Wisconsin hospital systems are planning to merge into one organization. (Photos provided by Froedtert Health)

The two Wisconsin hospital systems say their respective boards have approved a definitive agreement on a merger. The systems signed a letter of intent to merge in April, and the boards said this week they have signed off an agreement earlier this week.

Froedtert and ThedaCare said that the goal is to move together and form a merged system by the start of 2024. The organizations are looking to create a new system that would include 18 hospitals and many other care sites.

The deal still requires regulatory approval, and the systems note there will be other board approvals before the merger is complete.

Still, the heads of the two systems expressed their enthusiasm about completing another step toward the merger.

“We are excited to continue the process of bringing our locally led health care organizations together, working in concert with the Medical College of Wisconsin,” Cathy Jacobson, president and CEO of Froedtert Health, said in a statement. “Creating healthier communities throughout Wisconsin will take a lot of work as we move ahead, and we’re excited that we’re one step closer to embarking on this journey.”

The systems say that when the merger is complete, Jacobson will serve as CEO of the 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.

“ThedaCare and Froedtert Health have long legacies of investing in their communities. Both organizations are committed to helping Wisconsinites live their best lives, and we believe that the best way to do that is by coming together,” Andrabi said in a statement. “We look forward to further defining how we will combine our organizations to make health care better for everyone we are privileged to serve.”

Froedtert, based in Milwaukee, operates 10 hospital locations and more than 45 clinics throughout Wisconsin. ThedaCare operates eight hospitals and a host of other care sites across the state. The combined revenue of the two systems is more than $4 billion, according to the Milwaukee Journal-Sentinel.

Both systems said that the merged system would remain based in Wisconsin, and they are aiming to provide more healthcare options and will work to keep people healthy. They also say they are focused on improving health equity in their communities.

When the merger is complete, they also said they’ll continue working with the Medical College of Wisconsin to improve primary and specialty care and on graduate medical education.

The Froedtert and ThedaCare brand names will continue to exist after the merger is complete, the systems said.

While fewer hospital mergers took place through much of the COVID-19 pandemic, the pace of mergers appears to be picking up.

There were 20 announced hospital mergers and acquisitions in the second quarter of 2023, the highest number since the first quarter of 2020, according to a report by Kaufman Hall, the healthcare consulting firm. Kaufman Hall and other analysts say they expect to see more mergers in the coming months and in 2024.