Healthcare Business News

University of Wisconsin hospital deal crosses Illinois state line

By Joe Carlson
Posted: April 29, 2014 - 7:15 pm ET

The University of Wisconsin plans to establish a presence in a major northern Illinois city that has seen several hospital merger plans flounder in recent years. UW Health system has announced plans to merge with SwedishAmerican Health System in Rockford, Ill.

UW Health, which operates the 530-bed University of Wisconsin Hospital and Clinics in Madison, has been affiliated with SwedishAmerican since 2010, in a partnership that led to the construction of the $40 million SwedishAmerican Regional Cancer Center in Rockford, according to a joint statement from the healthcare providers.

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SwedishAmerican also receives telemedicine services from UW Health. Madison is less than an hour and a half drive from Rockford, so the two hospitals are in relative proximity, even though they are in different states.

Both boards of directors have approved a letter of intent, and the deal is expected to close by the end of the year, pending regulatory approval.

Under the proposed merger, Dr. Bill Gorski would remain CEO of SwedishAmerican, and would report to his board and the board of University Health Care Inc., a not-for-profit that partners with regional hospitals for UW Health.

“As UW Health grows, we are looking for partners who share a commitment to promoting the health of the communities they serve, and SwedishAmerican has made that commitment,” said Dr. Jeffrey Grossman, president and CEO of the UW Medical Foundation and senior associate dean for clinical affairs for the University of Wisconsin School of Medicine.

Rockford's population of 150,000 is served by three health systems, but it has seen merger announcements over the years run into trouble. In January, Rockford Health System announced the cancelation of a merger with suburban Chicago's Cadence Health, only months after both providers had signed letters of intent to merge their organizations.

That news followed a decision in 2012 to cancel the announced merger between Rockford Health and OSF Healthcare System in Peoria, which runs one of three acute-care hospitals in Rockford, after the Federal Trade Commission said the deal would raise antitrust concerns.

In 1988, a federal judge granted an injunction that blocked a merger between SwedishAmerican and Rockford Memorial Hospital, and the deal stalled soon after. In 1997, SwedishAmerican also explored a merger with OSF, but that deal fizzled over financial issues, even though the FTC approved it.

Follow Joe Carlson on Twitter: @MHJCarlson

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