Froedtert, ThedaCare to become one organization at the start of 2024

A merger of two eastern Wisconsin health systems will take effect at the start of the new year.

Froedtert Heath, based in Milwaukee, and ThedaCare, based in the Fox Valley, have been working on the merger since it was announced in April. The health systems announced Tuesday they will become one organization effective Jan. 1.

It’s the latest hospital merger to get finalized in Wisconsin, as the state has experienced several in recent years. This summer, Marshfield Clinic Health System and Essentia Health entered an agreement with Minnesota-based Essentia Health to create a new health care network serving parts of four states. A little over a year ago, Gundersen Health System and Bellin Health completed a merger, and Advocate Aurora Health and Atrium Health did the same one day later.

That’s as the health care industry has consolidated substantially over the last two decades, and at a more rapid pace since 2010, according to a 2020 study by Harvard Medical School.

Various regulatory bodies including the Federal Trade Commission have given approval to the deal between ThedaCare and Froedtert, officials said.

The nonprofit health systems combined for more than $4 billion dollars in revenue and have 18 hospitals and other sites in southeastern, northeastern and central Wisconsin, according to the Milwaukee Journal Sentinel.

“This is an important and exciting moment for Wisconsin,” said Cathy Jacobson, president and CEO of Froedtert Health, in a statement. “As a combined organization, we will continue to strengthen local health care, working closely with the Medical College of Wisconsin.”

ThedaCare and Froedtert are expected to keep separate names for their facilities. The hospital systems say planning on how the combined organization will operate will continue through next year.

The hospitals say the merger will help support the health of the communities they serve and enhance the partnership with the Medical College of Wisconsin.

“This combination is an important advancement for health care in Wisconsin,” said Jud Snyder, Froedtert Health’s current board chair, in a statement. “We have long thought about how we can best serve the people of Wisconsin.”

While mergers may have benefits for health systems, Rachel Werner, a health care economist at the University of Pennsylvania, recently told WPR’s “The Morning Show” that mergers in general have a negative effect on prices.

“They tend to increase the price that insurers pay for care for commercially insured individuals, and they don’t really have any improvement in quality,” she said. “Really, what we see are just higher prices — no improvement for patients.”