CHICAGO — Two Chicago-based health systems — Alexian Brothers Health System and Adventist Midwest Health — intend to join forces to create a joint operating company with a combined nine hospitals.
The two said in a statement they have signed a non-binding letter of intent that calls for the two to create an integrated health care system. ABHS operates five hospitals in northwest suburbs of Chicago and AMH operates four in the west and south suburbs.
The agreement is subject due diligence and regulatory approval and the systems hope to complete a partnership — which would create one of the larger systems in the area — by the fall.
Under the JOC, the two would preserve their individual religious identifies while integrating their operations. They would maintain separate ownership of assets and finances. Both are currently part of larger systems. Alexian Brothers became part of Missouri-based Ascension Health in 2012 and Adventist Midwest is part of the Florida-based Adventist Health System.
The new JOC could issue future debt for the system with the approval of the parent companies.
"We will be taking another important step toward ensuring the long-term viability of the Alexian Brothers' 800-year healing mission. This affiliation is also an example of Ascension Health's strategic commitment to developing regional integrated systems of care," Alexian's chief executive officer Mark A. Frey said in a statement.
Frey would serve as CEO and Adventist CEO David Crane would serve as executive vice president.
As part of Ascension's acquisition of Alexian Brothers, it refunded the smaller system's debt and provided an infusion of about $175 million in new money for projects. Alexian had sought deeper pockets to address capital needs and manage through federal health care reform.
Both parent systems carry ratings in the double-A category.