Froedtert Health and ThedaCare joint venture to build so-called micro-hospitals in Oshkosh and Fond du Lac
Guy BoultonFroedtert Health and ThedaCare have formed a joint venture that plans to build medical campuses, which will include so-called micro-hospitals, in Oshkosh and Fond du Lac.
The two projects, which also will include medical offices, are estimated to cost a total of $111.3 million.
The micro-hospitals each will have an emergency department staffed around the clock and eight beds for patients who require an overnight stay.
Froedtert Health has opened similar hospitals in Oak Creek, New Berlin, Pewaukee and Mequon in recent years.
“We do obviously want to grow as a regional health system,” said Cathy Jacobson, president and CEO of Froedtert Health. “We think we have a lot to offer as Froedtert Health. But we want to do it in a way where we go in with community partnerships who actually know their communities.”
The announcement means that Oshkosh, a city of 67,000, and Fond du Lac, a city of 43,000, each will have three hospitals, including three emergency departments staffed around the clock.
Ascension Wisconsin and Advocate Aurora Health have hospitals in Oshkosh and SSM Health has a hospital in Fond du Lac.
Advocate Aurora is building a hospital in Fond du Lac initially projected to cost $67 million and expected to open in 2024.
Froedtert Health and ThedaCare’s joint venture plans to build the Oshkosh campus on the Fox River in downtown Oshkosh, the site of a major redevelopment.
The campus will be closer to residential neighborhoods than the two existing hospitals, Jacobson said.
The project, which will include an ambulatory surgical center with three operating rooms, is projected to cost $76.3 million.
The Fond du Lac campus is projected to cost $35 million and will be in a retail district.
Construction is expected to begin next spring and be completed in 2024.
Froedtert Health and ThedaCare each will have a 50% interest in their new joint venture.
ThedaCare, which has a hospital in Neenah, now has a presence in Oshkosh. And Jacobson said that Froedtert Health has been drawing more patients from Fond du Lac in recent years.
Froedtert Health has worked to expand its presence in recent years as health systems have consolidated.
The health system has a 25% stake in Froedtert South, formerly United Hospital System, with has hospitals in Kenosha and Pleasant Prairie.
Froedtert South operates as a separate entity but shares an Epic system for electronic health records with Froedtert Health and must adhere to Froedtert Health’s clinical guidelines and quality measures.
Froedtert Health also bought a majority stake in Holy Family Memorial Medical Centers in Manitowoc in 2021.
The joint venture with ThedaCare could be a step toward the two health systems eventually aligning as health systems continue to consolidate.
ThedaCare was long thought of a likely candidate to merge with Bellin Health in Green Bay.
In June, Bellin Health announced plans to merge with Gundersen Health in La Crosse.
Separately, Marshfield Clinic Health System this week announced that it was in merger discussions with Essentia Health, based in Duluth, Minn. Marshfield Clinic Health System previously explored a potential merger with Gundersen Health.
Froedtert’s micro-hospitals — the health systems refers to them as community hospitals — have proven successful and have an average of two to three patients a night, Jacobson said.
The hospitals’ contracts with health insurers have lower rates for emergency services than larger hospitals, she said.
Those hospitals’ emergency departments offer more services for patients.
Froedtert Health had revenue of $3.3 billion in its fiscal year ended June 30, up from $3.1 billion in the previous fiscal year, according to its most recent financial statement.
Its operating revenue fell to $95.9 million, down from $221.9 million in its 2020 fiscal, as the cost of salaries, fringe benefits and supplies increased.
The health system also received $29.6 million in the 2020 fiscal year from the federal CARES Act passed during the pandemic compared with $5.3 million in its 2021 fiscal year.
Froedtert Health reported a net loss of $129.8 million in its 2021 fiscal year compared with a net profit of $580.7 million the previous fiscal year.
The loss stemmed from $225.7 million in realized and unrealized losses on its investment portfolio because of the sharp drop in the stock and bond markets.
Froedtert Health — which has an investment portfolio of roughly $2 billion — posted $358.9 million in realized and unrealized gains in its investment portfolio in its 2021 fiscal year.
ThedaCare had revenue of $1.2 billion in 2021, up from $1 billion in 2020. It reported an operating profit of $48.4 million, up from $23.7 million the previous year. It had a net profit of $177.4 million in 2021, up from $104.6 million the previous year.
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