Hospital merger could affect 2 million patients in Wisconsin, 3 other Midwest states

About 2 million people in Wisconsin and three other Midwestern states could have better access to specialty health care.

That's if the merger between Marshfield Clinic Health System and Essentia Health goes through.

Marshfield Clinic operates hospitals and clinics throughout Wisconsin. This month, this announced a possible merger with Minnesota-based Essentia Health.

Both signed a written agreement on October 12 to explore the logistics of forming an integrated health system.

Brian Potter, senior vice president of finance and chief executive officer for the Wisconsin Hospital Association, said there are many reasons why health care systems merge.

“There are the basic economic reasons of scale and efficiency and cost savings,” he said. “You can learn from each other. Different systems have different expertise and services. Some may have specialists that the other system struggled to find, so now they can coordinate that coverage.”

Officials from Essentia and the Marshfield clinic declined to be interviewed. In a press release, the organizations said the merger talks are aimed at providing better access to primary and specialty care, as well as improving health outcomes.

The health systems have complementary geographies and capabilities, officials said. If combined, the merged health system would include 3,500 providers, 150 care facilities and 25 hospitals. About 1,600 of these providers would come from Marshfield Clinicalong with 11 hospitals and 60 clinics. EssentiaMeanwhile, it has 70 clinics and 14 hospitals.

In a statement, Essentia CEO Dr. David Herman, said he has admired Marshfield Clinic for more than three decades and appreciates the level of care the system provides.

He said Marshfield Clinic and Essentia share common values ​​and both have a mission-driven approach to health care.

“I am truly excited that we are working together for the benefit of our patients and colleagues,” said Herman. “Through a new partnership, we can support the care models, services, research and technologies to ensure sustainable and prosperous rural healthcare.”

Similarly, the CEO of Marshfield Clinic, Dr. Susan Turney, said in a statement that the potential merger could better serve rural communities as Essentia's expertise complements Marshfield Clinic.

“This is an exciting opportunity for both our organizations and those we serve,” he said. “These are two of the top health systems in the country that want to come together to serve rural communities and beyond.”

While the Marshfield Clinic and Essentia merger debate is the most recent hospital merger debate in Wisconsin, it likely won't be the last.

The hospital industry has consolidated significantly over the past two decades and at a faster pace since 2010, according to a 2020 study by scientists at Harvard Medical School.

Harvard scientists looked at patient outcomes from nearly 250 hospital mergers between 2009 and 2013. They found that hospital mergers lead to higher prices for commercially insured patients, and the quality of care at the merged hospitals either got worse or stayed the same.

Potter said that hasn't happened in Wisconsin, but has been an issue in states on the East Coast.

So far, Potter said health care mergers in Wisconsin have not eliminated competition. He pointed to the hospital association Wisconsin Hospital Finder toolwhich features a state map marking each hospital.

“There are at least two competing facilities and, in many cases, three, four or five within 30 miles (of each other),” he said. “In Wisconsin, we haven't seen mergers to eliminate competition. In other words, taking two players in two major market players and combining them into one. This is not the type of mergers we've seen in our state.”

Hospital mergers can be particularly beneficial for small, independent hospitals in rural communities that are part of a larger health care system, Potter noted.

“We've had a few of them around the state over the years where, frankly, their other option might have been closing,” he said. “And so I think another way it benefits patients is it creates access to areas that a stand-alone organization might not be able to provide.”