The planned merger of Atrium Health and Advocate Aurora Health, one of the largest proposed hospital mergers in years, has faced setbacks in Illinois.

The Illinois Medical Facilities and Services Review Board initially voted against the transaction, but later agreed to consider the planned merger. chicago tribune other Illinois media reported on Tuesday. The board said both systems will allow more information to be submitted.

Board approval is a necessary step for the transaction to move forward. Advocate Aurora operates in Illinois (the state’s largest healthcare system) and Wisconsin.

The two organizations originally hoped to complete the deal on Sept. 30, so even if the merger is approved, it could take longer than expected, news outlets said.

Atrium and Advocate Aurora originally announced plans to merge in May to form a combined system with $27 billion in annual revenue. Federal and state regulators must approve the transaction.

In a statement late Tuesday afternoon, Advocate Aurora said it was surprised by the board’s actions but expected the deal to be approved this year.

“State law requires a review board to approve all waiver certificate applications deemed completed by staff,” attorney Aurora said in a statement. “Our application was deemed complete last month, so we are surprised by today’s delay and will work with the Review Board to address any questions. Please know, our combination is still on track for completion.By the end of the year.”

Atrium Health said Tuesday that the system will continue to work with regulators.

“A number of regulatory agencies have requested confirmation of information related to the proposed strategic integration of Atrium Health and Advocate Aurora Health. and will continue to share appropriate information,” Atrium Health said in a statement.

If the transaction is finalized, the combined system will operate 67 hospitals with more than 1,000 ambulatory facilities in six states and employ more than 148,000 people.

System said the new organization will be named Advocate Health, but System will continue to use the Atrium and Advocate Aurora brands in local markets. The organization will be based in Charlotte, North Carolina, but the system said the combined system will maintain a strong presence in Chicago and Milwaukee.

The Federal Trade Commission made moves last year to block deals with some hospitals. However, the FTC generally opposes transactions involving health systems that operate hospitals in the same market.

With Atrium-Advocate Aurora’s planned transaction, the two systems operate in different divisions of the company, and some analysts predict the merger will receive federal approval. Atrium Health is based in Charlotte, North Carolina and serves North Carolina, South Carolina, Georgia and Alabama, and Advocate Aurora serves Illinois and Wisconsin.

If the deal is approved, analysts say it could prompt other healthcare systems to pursue similar mergers. The system can seek out merger partners in other markets to increase scale and scale, while avoiding potential regulatory scrutiny on transactions between competitors in the same market.

Some critics have opposed the deal, saying it would add to the burden on patients.

SEIU Healthcare, which represents more than 90,000 members in the Midwest, said in August it would oppose the deal. The union said it needed assurances that Chicago-area hospitals would not be closed to preserve profits.

“SEIU Healthcare argues that the proposed merger of proponents Aurora Health and Atrium Health jeopardizes access to affordable health care across Chicago and in underserved communities. ,” the union said in an Aug. 24 letter to the Illinois Board of Governors.

North Carolina Treasurer Dale Folwell said in May that the Atrium-Advocate Aurora deal was an “unwise merger” and urged federal and state officials to consider it carefully.

“North Carolina, one of the nation’s top five metropolitan markets with the highest concentration of healthcare, is well aware of the negative effects of consolidation. They fail to deliver on their promises and instead cause higher costs, reduced access and lower levels of care.”

In announcing the merger, Atrium and Advocate Aurora pledged to make significant investments to improve care for underserved communities. The integrated system leader has pledged to spend $5 billion to address health equity and other community needs.

Over the past year, there have been fewer deals with hospitals nationwide. Only 49 hospitals will be consolidated in 2021, down from 79 the previous year. Twenty-five hospital deals have been announced for the first half of 2022, according to consulting firm Kauffman Hall.

There are fewer deals these days, but there are bigger deals, and Kaufman Hall says that could be the trend for the foreseeable future.

About two weeks ago, Michigan-based Trinity Health completed its acquisition of Iowa’s MercyOne. This is his $3 billion system in revenue. Trinity co-runs her MercyOne with her CommonSpirit Health, which agreed to purchase all of MercyOne’s assets in the spring.

Analysts expect the pace of hospital deals to pick up eventually, although a recession and possible recession could complicate deals.

Michael Abrams, managing partner of consulting firm Numerof & Associates, is an outspoken critic of hospital mergers. in an interview in July chief medical officerHe said he fears there will be more mergers between large health systems if regulators approve the deal between Atrium and Advocate Aurora. He hopes the FTC will oppose the deal, but is skeptical that it will because the system is not in an overlapping market.

“If this doesn’t provoke a backlash from the FTC, it will eventually open the door for a series of mega-mergers carefully designed to avoid overlapping markets,” Abrams said in July. rice field.

This article has been updated with statements from Atrium Health and Advocate Aurora Health.