SSM Health Care plans to purchase Wisconsin's Dean Health Systems this summer

May 1, 2013


St. Louis-based SSM Health Care signed an agreement on April 15 with Madison, Wis.-based Dean Health Systems to acquire the physician-owned, 500 doctor multi-specialty group and make it a for-profit subsidiary of SSM. The deal could close this summer, pending the approval of Dean's 300 physician shareholders, the Wisconsin Office of the Commissioner of Insurance and federal agencies, said chief executives of both organizations. They did not disclose the sale terms.

The two companies say the roots of their relationship date back a century, since the Franciscan Sisters of Mary (then called the Sisters of St. Mary) opened St. Mary's Hospital in Madison in 1912. Catholic, nonprofit SSM and for-profit Dean have an established integrated delivery network in south central Wisconsin, and they jointly own an insurance company, Dean Health Plan. Since July 2012, Dean Clinic and St. Mary's Hospital also have partnered in operating a Medicare accountable care organization. SSM Health Care President and Chief Executive William P. Thompson said, "We have a long history of working with Dean, and I think we share a common commitment to doing what's in the best interest of the patients that we collectively serve and in the communities where we're currently operating."

Thompson said the new agreement gives emphasis to a transformation SSM has been going through, moving from a model principally focused on caring for the sick to one that is focused on keeping people healthy and being rewarded and recognized for those efforts. Last year marked the first time SSM received more revenue from outpatient care than from inpatient services.

Dean Health System's President and Chief Executive Dr. Craig Samitt said, "Now is the time, especially with all of the changes in the health care industry, for us to get closer in order to be more successful." He said there is a great familiarity and cultural alignment between the organizations. The executives acknowledged the agreement came at a time when many systems are talking about different forms of integration or consolidation as they strive to improve quality and lower costs.

Samitt said: "We also would envision that we're going to continue to see not just health insurance reform but payment reform, rewarding groups through alternative payment models for population health. Integrated systems will likely fare better in managing population health reimbursements than loosely integrated or even 'siloed' or separate systems, so those are the key drivers in our view."

Thompson said they anticipate an expansion of Dean Health Plan "not only as an insurance provider in the state of Wisconsin but extending its competencies and capabilities throughout the rest of the SSM system." In addition to Wisconsin, SSM operates in Oklahoma, Illinois and Missouri.

He said he couldn't provide specifics, but that a number of organizations would be interested in services provided by Dean Health Plan in their markets.

While working toward finalizing the transaction, the chief executives said work will be done on a transition plan and the formation of an integration team to guide the operational aspects of the transition. The physicians currently part of Dean Health System's governance will continue to have a significant role in the governance and operation of the new, merged organization, Thompson said.

SSM currently has about 4,000 employees in Wisconsin and roughly 25,800 employees, including 900 employed physicians in the system. Dean and its subsidiaries have nearly 4,000 employees, including its physician employees and physician owners. Dean has a network of more than 60 clinics.


Copyright © 2013 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2013 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.