Marshfield Clinic Well being System and Essentia Well being have signed an integration settlement, placing them one step nearer to merging, the nonprofit well being methods introduced Thursday.
The mixed firm would comprise 25 hospitals in Michigan, Minnesota, North Dakota and Wisconsin, a well being plan and roughly $6 billion in annual income. Marshfield of Wisconsin and Duluth, Minnesota-based Essentia signed a memorandum of understanding in October and count on the deal to shut by the top of the 12 months, pending regulatory approval.
“We’re each physician-led organizations with an unwavering dedication to the well being of rural communities,” Essentia Well being CEO Dr. David Herman stated in a information launch.
Herman could be CEO of the mixed group, which might function underneath a brand new father or mother firm. Marshfield CEO Dr. Susan Turney stated previous to the merger announcement that she would step down as CEO this fall.
The proposed Essentia-Marshfield merger represents the most recent transaction in an lively Midwestern acute-care market.
Considered one of Marshfield’s essential opponents, 17-hospital Aspirus Well being of Wausau, Wisconsin, signed a letter of intent this month to mix with St. Luke’s Duluth, a two-hospital system in Minnesota. Milwaukee-based Froedtert Well being and Neenah, Wisconsin-based ThedaCare signed a letter of intent to merge in April. In November, Gundersen Well being System and Bellin Well being, each primarily based in Inexperienced Bay, Wisconsin, merged to kind an 11-hospital system. Sioux Falls, South Dakota-based Sanford Well being and Minneapolis-based Fairview Well being Providers are additionally pursuing a merger.
Marshfield recorded a $367.9 million working loss in 2022 on $2.94 billion of working income, in response to an unaudited monetary assertion for the interval ended Dec. 31. The well being system reported a $60.2 million working loss in 2021 on $2.8 billion of income.
Essentia generated $79.5 million of working revenue in 2022 on $2.62 billion of working income, in response to an audited monetary assertion for the interval ended June 30. The well being system reported $168.3 million of working revenue in 2021 on $2.45 billion of working income.
Whereas Essentia reported an working achieve, two of its hospitals are susceptible to dropping their 340B drug low cost program standing as a result of some sufferers are poised to lose Medicaid throughout eligibility redeterminations, which might dent revenues.