Synergy Froedtert In-depth Discussions
January 31 2008 --
West Bend, Wis. – The SynergyHealth board today announced the health system will enter into in-depth discussions with Froedtert & Community Health regarding a potential affiliation. Froedtert & Community Health was selected to begin the final steps toward affiliation after a review of potential affiliation partners.
“After a careful and thorough review, Froedtert & Community Health emerged as a strong partner that is committed to investing not only in St. Joseph’s Hospital and the West Bend Clinic but also our community,” said SynergyHealth CEO Gregory Banaszynski. “We look forward to structuring an agreement with Froedtert that will enable us to control costs, improve services and develop a stronger health care infrastructure in Washington County.”
SynergyHealth will enter into in-depth discussions with Froedtert & Community Health with the intent of finalizing an affiliation agreement in the next 90 days. The discussions will be led by a seven-person Steering Committee, consisting of the CEO and Chair of SynergyHealth, the Presidents and Board Chairs of St. Joseph’s Hospital and West Bend Clinic and the Board Chair of the SynergyHealth Foundation.
“This partnership with SynergyHealth provides an outstanding opportunity to strengthen health care in West Bend and Washington County by working with the leadership of St. Joseph’s Hospital, the West Bend Clinic, and the community,” said Froedtert & Community Health CEO William D. Petasnick. “Once an affiliation agreement is finalized, we plan to recruit additional physicians and expand services while investing in clinical integration to improve the coordination of care.”
As part of the affiliation, St. Joseph’s Hospital, the West Bend Clinic and SynergyHealth staff would become part of Froedtert & Community Health and the Progressive Health organization. Final details and logistics of the affiliation will be worked out over the next few months with continued input and involvement from our community.
“The decision to pursue the next stage of affiliation discussions is the beginning, not the end of this process,” said SynergyHealth Board Chairman Thomas Johnson. “Moving forward, we will be actively working with our business and community leaders in this process.”
Affiliation discussions will center on further defining the commitments Froedtert made as part of the proposal it submitted. Commitments include an expansion of clinical service lines in appropriate areas. Areas under consideration include cancer, cardiovascular, neuroscience, women’s health, and orthopedic services. In addition, Froedtert committed to securing SynergyHealth’s retained earnings, estimated at $30 million, for the benefit of our community. They will match these funds up to $30 million in the first five years and are committed to providing an additional $30 million over ten years.
Why affiliate?
The SynergyHealth board determined an affiliation provides the best opportunity for SynergyHealth to serve the future health care needs of Washington County. The board was particularly aware of the dramatic changes in the region’s health care marketplace since SynergyHealth was formed five years ago. In just the past year, ProHealth Care has acquired Medical Associates; Aurora Health Care has acquired Advanced Healthcare; and Columbia St. Mary’s and Froedtert & Community Health have agreed to combine.
“Looking to the future, consolidations in health care called into question our long-term ability to compete and survive as a small, independent health system,” said SynergyHealth Board Chairman Thomas Johnson. “By affiliating with Froedtert & Community Health we will be able to produce a more cost-effective health care product for local businesses and residents, while bringing the benefits of advanced technology and specialized care to Washington County.”
The affiliation with Froedtert & Community Health is intended to enable SynergyHealth to: 1) achieve strong economies of scale to lower costs; 2) avoid costly duplication of facilities and services; 3) improve access to capital to bring needed services into the community; and 4) compete more effectively in a rapidly consolidating marketplace.
Affiliation Process
The SynergyHealth board has been reviewing a variety of strategic alternates for the future of the health system for more than a year. Last fall, the system requested affiliation proposals from seven area health systems. In December, the board narrowed the affiliation candidates to Aurora Health Care, Froedtert & Community Health and Wheaton Franciscan. In January, the board arranged detailed interviews for key stakeholders – including doctors, employees, management, board members and community leaders – with each of the three systems.
“We appreciate the significant time and energy that each of the health systems invested in discussions with Synergy,” said Johnson. “Each of the three systems offered great opportunities for our community.”
The system evaluated each of the systems based on several core criteria, including their ability to help Synergy:
• Maintain a high degree of local governance and decision making for citizens of Washington County;
• Ensure shared mission, vision and values;
• Improve the quality of care and local access to expanded services; and
• Control future health care costs.
“Froedtert & Community Health has stated its commitment to making St. Joseph’s Hospital a regional destination for care and to improving the overall level of care available in Washington County,” said Johnson. “Additionally, Froedtert’s relationships with the Medical College of Wisconsin and Columbia St. Mary’s would ensure our patients have access to a continuum of care and to highly specialized medical services throughout southeastern Wisconsin.”
SYNERGYHEALTH
SynergyHealth is a regional health system serving the greater Washington County community. St. Joseph’s Hospital, West Bend Clinic and SynergyHealth Foundation are members of SynergyHealth.
FROEDTERT & COMMUNITY HEALTH
Froedtert & Community Health is a regional hospital system formed in 2001 by Froedtert Hospital and Community Memorial Hospital. Joining the capabilities of a 200-bed community hospital and a 450-bed academic medical center, Froedtert & Community Health delivers nationally recognized, cost-effective healthcare treatment and technologies from two hospitals and multiple clinic and program sites in Southeastern Wisconsin. In 2006, adult patient admissions for Froedtert & Community Health exceeded 34,000.
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