Advocate Aurora and Atrium completed their merger, creating the $27B Advocate Health

On December 2, 2022, Advocate Aurora Health and Atrium Health announced they had closed their merger, creating Advocate Health — the nation's fifth-largest nonprofit health system by revenue, generating more than $27 billion and operating 67 hospitals and more than 1,000 sites of care across six states, with nearly 6 million patients expected to be treated each year.

Industry observers had watched the deal as a test of whether federal regulators would challenge a cross-market hospital merger. The two systems have no geographic overlap — the aspect that has tripped up prior hospital mergers — and instead span Illinois, Wisconsin, Georgia, North Carolina, South Carolina and Alabama together.

The FTC had warned it was hit with a 'tidal wave' of merger filings and could not review all deals before required deadlines; Advocate Health would only say it had 'taken all necessary action related to any regulatory approvals.' Economists told Healthcare Dive the likelier review angle was insurer overlap: employers with locations and employees across all six states could face changed bargaining leverage when negotiating with insurers such as UnitedHealthcare, Harvard Business School professor and former FTC deputy director Leemore Dafny said.

Governance was engineered as an 18-month bridge rather than a winner-take-all fight: Advocate Aurora's Jim Skogsbergh and Atrium's Eugene Woods lead the combined organization as co-CEOs, after which Skogsbergh retires and Woods continues as sole leader. The board splits evenly between the two organizations, with Atrium chair Thomas Nelson leading the combined board until the end of 2023 and Advocate Aurora board chair Michele Richardson succeeding him for a two-year term.

The nation's fifth-largest nonprofit health system by revenue: more than $27B in revenue, 67 hospitals, 1,000+ sites in six states, nearly 6 million patients a year.

Neither system's hospital markets overlap, removing the local-concentration issue that has sunk prior hospital mergers.

The FTC said merger filings outpaced its review capacity, so a deal that closed without a challenge effectively cleared.

Scale across six states shifts bargaining leverage toward the system when negotiating with national insurers.

An 18-month co-CEO term with a planned retirement avoided a leadership fight between two incumbent CEOs.

Cross-market mergers can reach national scale where local overlaps draw antitrust suits, and a time-boxed co-CEO bridge can merge two leadership cultures.

The system launched with the transition clock already running: Woods is set to become sole CEO after 18 months, when Skogsbergh retires, and board leadership rotates from Atrium's Thomas Nelson to Advocate Aurora's Michele Richardson at the end of 2023. Asked whether the FTC had contacted the system, Advocate Health declined to detail its regulator contacts, saying only that it had taken all necessary action related to any regulatory approvals.