Aurora Health Care

Aurora Health Care is a not-for-profit health care system located in eastern Wisconsin and headquartered in Milwaukee. The system has 13 hospitals, over 100 clinics, and more than 140 community pharmacies.

Since its formation in 1984, Aurora's rapid expansion by acquisition of independent community hospitals and construction of new hospitals has been met with controversy. Despite this, with 25,087 employees including 3,385 physicians, Aurora is Wisconsin's largest private-sector employer.

Formation (1984–1987)
In 1984, St. Luke's Medical Center, located on Milwaukee's south-side, and Good Samaritan Medical Center, located in Milwaukee's near north-side, formed an affiliation called St. Luke's Samaritan Health Care. This partnership was the first in the Milwaukee-area of two formerly independent hospitals. Four years later, in 1987, the partnership changed its name to its present name of Aurora Health Care when Mount Sinai Medical Center merged with Good Samaritan Medical Center.

It was the belief of the three hospitals that partnering would allow the hospitals to reduce costs, maintain a high level of care, compete with the other hospitals in the Milwaukee metropolitan area.

Expansion with existing hospitals (1988–1997)
After forming a partnership with Aurora, the Visiting Nurse Association (VNA) of Milwaukee joined Aurora in 1988. The VNA, founded in 1907, is Wisconsin's largest provider of hospice care for children and adults.

Between 1992 and 1995, the health care system added five more hospitals:
 * Sheboygan Memorial Medical Center (1992)
 * Milwaukee Psychiatric Hospital (1993)
 * Hartford Memorial Hospital (1993)
 * Two Rivers Community Hospital (1993)
 * West Allis Memorial Hospital (1995)

Two more hospital facilities were brought into the Aurora system in 1995. The Walworth County Board voted to transfer ownership of its 78-year-old Lakeland Medical Center to Aurora in order to discontinue county operation and funding of the hospital and strengthen its ability to serve Walworth County residents in the changing health care market. Later in the year, Catholic Health Corp. transferred ownership of Trinity Memorial Hospital in Cudahy, founded in 1958, to nearby St. Luke's Medical Center.

The Walworth County Board, on March 14, 1995, agreed to transfer the county-run Lakeland Medical Center in Elkhorn to Aurora for about $16 million. In the deal, Aurora assumed the hospitals bond obligations and debt and agreed to contribute to a fund to cover the uninsured. Months later, Memorial Hospital of Burlington would be the final hospital to join Aurora Health Care in February 1996.

After over one year of discussions, for-profit Dean Health Care of Madison and Aurora, two of the largest health care systems in Wisconsin, broke off alliance talks on November 21, 1996. The alliance would have created a new physician medical group in the northern and northwestern Milwaukee metropolitan area. However, Aurora vice president Diane De La Santos stated that the health care markets in Milwaukee and Madison changed "so much so fast" in the year since a letter of intent was signed between the two organizations. Both organizations decided to "focus on their respective markets."

Following nine years of expansion, Aurora, on January 15, 1997, released a management reorganization that would organize management into geographic regions&mdash;north, central, metro, and south. The reorganization was designed, according to G. Edwin Howe, the president of Aurora, "to become more closely integrated and more cost-effective to compete effectively in today's managed care environment." As a result, some layoffs, mostly at the administrative level, would result.

Expansion by construction (1998–2002)
In March 1998, Aurora announced that it would build its first hospital on the west-side of Kenosha. Three months later in June, the health care system announced that it would replace Two Rivers Community Hospital with a new facility. The Kenosha facility opened in February 1999 and the new Two Rivers hospitals opened in June 2000.

Constrained by space at the 17-acre St. Luke's Medical Center campus, Aurora announced plans to expand upward by building a 12-story "heart tower" on top of existing parking structure in October 2000. The expansion has 270 beds and opened in 2004.

During the spring of 2002, the five-story Aurora Women's Pavilion was opened at West Allis Memorial Hospital.

On October 27, 2003, the health care system opened a new 84 bed hospital in Oshkosh. The new hospital employs over 400 people. It competes with the 157 bed Mercy Medical Center.

Recent activity
In March 2004, Aurora Health Care announced a new quick care service, the first of its kind in the Milwaukee area. The quick care kiosks, known as Aurora Quick Care, will be staffed with nurses that can handle basic, common medical issues for a flat rate. Since its creation, Aurora has opened 19 of these facilities including five in Wal-mart Supercenters.

After leading the health care system since its creation 22 years earlier, G. Edwin Howe announced his retirement as president and chief executive officer. After six months of searching, Nick Turkal, M.D., a family practice physician and president of the Aurora's metro Milwaukee region, was announced as Howe's replacement effective on January 1, 2007. Turkal has been employed by Aurora Health Care since 1987.

Summit Hospital
In March 2001, Aurora announced plans to build a new hospital in the Oconomowoc-controlled part of the Pabst Farms development. In order to avoid Aurora building a hospital at the proposed site, the Oconomowoc Common Council rezoned to the property in June 2001. A month later, Aurora sued Oconomowoc because it believed that the rezoning was done illegally.

As a result of the stalled Oconomowoc hospital, Aurora revealed plans on April 21, 2004 to construct an 88-bed hospital in the Pabst Farms development located in the town of Summit only a few hundred feet south of the proposed Oconomowoc site. If built, it would be Aurora's first hospital in Waukesha County. Almost immediately after the announcement, industry observers and its competitors forecast an increase in health costs in western Waukesha County. An immediate point of contention became the duplication of services by Oconomowoc Memorial Hospital, only three miles away from the proposed site.

The president of Waukesha insurance brokerage Frett/Barrington stated, "From a business perspective, I can see why Aurora is intent on building a hospital. But from a community need standpoint, you can ask why this is necessary."

The Summit Town Board approved the zoning change needed for the hospital in 5-0 vote on December 2, 2004 after a public hearing on the subject attracted more than 1,00 people. However, the town was rebuked by the Waukesha County Board a few months later on April 26, 2005 when they rejected the zoning change approved by the town board in a 21-11 vote. Many supervisors that voted to reject the zoning changed cited their concern that health care costs would increase as a result of the new hospital. Within a month after the county board vote, Aurora Health Care and Summit sued the Waukesha County Board and the 21 supervisors that voted no saying that acted illegally by considering other factors besides land use.

After two judges rejected Aurora's lawsuit against Oconomowoc, in December 2001 and May 2005, a third Waukesha County Circuit Court judge overturned the past two rulings and sided with Aurora. This decision paved the way for a settlement between Oconomowoc, Summit, and Aurora. The Oconomowoc Focus summarized the agreement as follows: "...The city will use its extraterritorial rights to rezone town land in Pabst Farms, so Aurora can build there. In exchange, Aurora will release its hold (via a contract of sale dependent on the zoning of the parcel) on land in Pabst Farms, which is currently being considered for a mall. The town and city will jointly operate a fire station built in Pabst Farms. By way of a 230-acre land swap with the city, the town will get permanent boundaries. And Aurora will drop all of its hospital-inspired lawsuits against the city."

On March 1, 2007, the Summit Town Board approved the new Aurora hospital. Since the initial proposal Aurora has increased the number of beds at the hospital by 22 beds to 110 beds. It is expected to be completed in the summer of 2009.

Health Care costs
After over a decade of health care consolidation in the Milwaukee region, a study commissioned by Healthcare Network of Wisconsin (HCN) and performed by the consulting firm William M. Mercer Inc. in 2002, reports that health care costs in the Milwaukee metropolitan area were more than 50% higher than in other Midwestern metropolitan areas and continuing to rise rapidly. The study examined $470 million worth of claims from area companies that included around 103,000 insured employees. It found that local health insurance plans "are more generous and cover more dependents" and that "Milwaukeeans tend to be a bit sicker and use more health care." More importantly, the report found that Milwaukee-area physicians, hospitals, and other providers billed higher especially on costs that they control which include fee and types of services provided.

Many industry experts indicated that Aurora is the benchmark for prices in the Milwaukee area. The president of insurance broker and consulting firm Frank F. Haack & Associates, James Mueller, added, "Hospital providers other than Aurora justify their price increases by stating they are going to bring their pricing up to close to what Aurora's pricing is."

Two years later, on August 23, 2004, Milwaukee mayor Tom Barrett (D) and Congressman Paul Ryan (R) released a report from Government Accountability Office (GAO) showing that Milwaukee area health care costs more than average out of 239 metropolitan statistical areas across the country. The report showed that hospital costs were 63% higher, physician were 33% higher, and that overall health care spending was 27% higher than average.

Another group, the Greater Milwaukee Business Foundation on Health, Inc., found in both 2005 and 2006 that out of seven comparable Midwestern cities, Milwaukee had the highest health care costs.

While Aurora has expressed a willingness to attempt to reduce costs to patients where possible, health care costs in Milwaukee remain high. Former Aurora president G. Edwin Howe stated, "As a community, we cannot ignore the high costs of care. And to the extent that Aurora can step up to the table and help, we will get engaged in that dialogue."

Advanced Healthcare purchase
In late 2006, Advanced Healthcare, the largest independent practice in southeastern Wisconsin that has not aligned with a health care system, began seeking a buyer or a partnership with a Milwaukee-area health care system. Aurora Health Care, Columbia-St. Mary's and Froedtert (jointly), and Wheaten Franciscan all submitted proposals to Advanced Healthcare. Most physicians practicing with Advanced Healthcare work inside of Wheaten Franciscan and Columbia St. Mary's hospitals which are located in the north side of the Milwaukee metropolitan area.

Since the proposals were submitted, there has been intense speculation that if Aurora purchased Advanced Healthcare, it would build a hospital that would directly compete with Wheaten Franciscan and Columbia St. Mary's on the north side. Leo Brideau, chief executive of Columbia St. Mary's stated that recent heated competition between the health care systems in Milwaukee was the start of a "medical arms race."

At the end of April 2007, the Advanced Healthcare board voted to form a strategic alliance with Aurora.

On July 31, 2007, Advanced Healthcare agreed to bought by Aurora Health Care. The organizations announced that they will be joined "under a broad affiliation agreement." According to the agreement, the leadership of Advanced Healthcare will remain intact. In concert with the purchase announcement, Aurora and Advanced announced they would construct a new hospital in Grafton, a northern suburb of Milwaukee with little Aurora presence. Health care industry experts estimated the total cost of purchasing Advanced Healthcare and constructing the Grafton hospital at $250 million.

Hospitals

 * Aurora BayCare Medical Center (Green Bay)
 * Aurora Lakeland Medical Center (Elkhorn)
 * Aurora Medical Center (Hartford)
 * Aurora Medical Center (Kenosha)
 * Aurora Medical Center (Oshkosh)
 * Aurora Medical Center (Two Rivers)
 * Aurora Psychiatric Hospital (Wauwatosa)
 * Aurora St. Luke's Medical Center (Milwaukee)
 * Aurora Sinai Medical Center (Milwaukee)
 * Aurora Sheboygan Memorial Medical Center (Sheboygan)
 * Memorial Hospital of Burlington (Burlington)
 * St. Luke's South Shore (Cudahy)
 * West Allis Memorial Hospital (West Allis)