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St. Mary's parent company, Dean plan to merge

Published On: Apr 16 2013 09:26:44 AM CDT
Updated On: Apr 17 2013 07:50:10 AM CDT

MADISON, Wis. -

SSM Health Care, the parent company of St. Mary's Hospital in Madison, is moving toward a merger with Dean Health System, according to a release from both companies.

The two companies have signed an agreement under which Dean and its subsidiaries would becomes part of SSM Health Care. The deal still requires the approval of Dean Physician shareholders and other regulators.

“This is our opportunity to take the high quality/low cost model that SSM and Dean have developed in south central Wisconsin and expand it throughout the Midwest,” said SSM Health Care President and CEO William P. Thompson. “We are committed to partnering with our physicians in other regions to improve the patient experience, lower the overall cost of health care, and focus on keeping people healthy.” 

The two companies have worked together for 100 years, but Thompson said in an interview that this process will streamline finances and decisions between the entities.

“Change is inevitable,” Thompson said.  “Health care costs too much.  It's way too fragmented, and we need to become, we need to operate more in the future as a single organization.”

Dean Health System President and CEO Craig Samitt said this is a chance for his organization to serve patients on a larger scale by being connected to people throughout SSM’s network.  Samitt added the focus will be low cost, high-quality care.

“We have an opportunity to accelerate that and even extend our good work from Wisconsin to other SSM markets,” Samitt explained.

“Where mergers result in higher costs is when those mergers take competition out of the market,” Thompson stressed.  “There is no competition between SSM and Dean.”

Carl Vieth is a health systems expert at the University of Wisconsin-Madison, after years of work in the public health sector.  Vieth said even though the two companies are calling it a merger, the process is an acquisition by definition. 

Vieth said putting Dean under the same ownership as St. Mary’s could heighten health care competition in Madison and make it tougher for patients there to get referrals outside of the system.  He said the buyout probably won’t result in higher medical costs for people, but slightly higher premium costs are a possibility.

“It's a protection against price pressure because they command such wide resources, they also can then sort of set the price,” Vieth said, “and it makes it easier for a large integrated system to maintain their profitability and not to have the external pressure of a large insurance group saying, here's what we're going to pay.”

The merger could be complete as early as this summer. The companies aren't releasing terms of the deal.

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