AdventHealth, Ascension Look to Unwind Partnership After 7 Years
The health systems said they are seeking to break down AMITA Health, a joint operating company that serves residents of the greater Chicago area.
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By - AdventHealth and Ascension recently announced that they are looking to unwind a longstanding partnership that resulted in the creation of a joint operating company that serves the healthcare needs of nearly 6.6 million residents in the greater Chicago area.
The health systems said in an announcement on Oct. 21st that they have decided to dissolve the company called AMITA Health after leaders of both systems “determined that going forward separately is in their collective best interest in order to more nimbly meet the changing needs and expectations of consumers in the rapidly evolving healthcare environment.”
AMITA Health was created seven years ago by AdventHealth and Ascension and consisted of nine hospitals. The company has since expanded to 19 acute and specialty hospitals in Illinois, making it one of the largest hospital systems in the state.
AdventHealth and Ascension did not provide a timeline for the unwinding of AMITA Health. However, both organizations are “committed to a smooth and expeditious transition,” with no disruption to patient care.
According to the announcement, AdventHealth and Ascension will operate their individual hospitals and related care sites in the greater Chicago area following the split.
Additionally, four hospitals and healthcare facilities will continue to be run and consolidated by AdventHealth, the health system added in a letter to the Electronic Municipal Market Access (EMMA) website, run by the Municipal Securities Rulemaking Board (MSRB). As of the end of 2020, these four hospitals comprised nearly 7 percent of total operating revenue of AdventHealth’s Obligated Group.
The unwinding of a healthcare deal of this size is rare. Healthcare merger and acquisition activity has been high since the reveal of AMITA Health in 2015, as hospitals and health systems seek partners to survive a more consumer-driven, value-based healthcare environment. AMITA Health itself merged with Presence Health in 2018 in a deal made with Ascension.
Healthcare merger and acquisition activity has shifted since the start of the COVID-19 pandemic. Healthcare consulting firm Kaufman Hall recently reported that while there are fewer deals being made, the values of mergers and acquisitions are significantly increasing. This trend is likely to continue as healthcare organizations team up to recover from revenue losses stemming from the COVID-19 pandemic.
The announcement from AdventHealth and Ascension, however, throws a wrench in the healthcare consolidation trend, which has been highly criticized by academics and patient advocacy groups that argue hospital consolidation increases prices without quality of care benefits.
