Aspirus plans to invest $300 million in Duluth-based St. Luke's

DULUTH — Aspirus Health plans to invest at least $300 million in St. Luke's over the course of eight years, provided a merger agreement receives regulatory approval.

The Wisconsin- and Duluth-based health systems on Monday announced they have signed a "definitive agreement" that moves the two organizations closer to a formal merger. The planned affiliation has been in the works for several months, with the two parties first announcing a letter of intent in July.

The capital investment in "strategic projects" at St. Luke's was among the terms unanimously approved by the board of directors at both nonprofit organizations, officials said in a joint news release.

The agreement also calls for Aspirus to implement standard software systems within two years to "promote integration and efficiency." That includes Epic, the leading national provider for patient medical records.

Aspirus additionally plans to expand its health care insurance plan into the St. Luke's service area within two years, the release said.

“For more than 140 years, we’ve taken great pride in caring for this region,” Eric Lohn, St. Luke’s co-president, CEO and chief financial officer, said in a statement. “With the challenges facing the health care industry, including St. Luke’s, we believe that now is the time to affiliate. We are confident that Aspirus is the right partner to help us further grow and continue providing the best level of care for the next 140-plus years.”

All six unions representing St. Luke's staff have signed letters in support of the agreement, the health systems said, and Aspirus "has committed to honoring all physician, labor and union contracts and looks forward to providing new growth and development opportunities for all St. Luke’s team members."

The combined system would operate 19 hospitals and 130 outpatient locations with nearly 14,000 employees, including 1,300 physicians and advanced-practice clinicians. It would be based at Aspirus' headquarters in Wausau, with a corporate office in Duluth.

“I’m grateful for the support we’ve received as we’ve continued through this affiliation process with our like-minded partner St. Luke’s,” Aspirus President and CEO Matt Heywood said in the release. “Together, we will continue to evolve the way we care for our patients, especially those in rural areas, who will have the opportunity to access the same high level of care as patients in other parts of the country. We look forward to working with regulators on the approval of the affiliation.”

The merger must still undergo state and federal regulatory review. Minnesota Attorney General Keith Ellison earlier this month said his office would review the agreement, along with a proposed merger between Duluth-based Essentia Health and Wisconsin-based Marshfield Clinic Health System.

A meeting is planned for Wednesday, Oct. 25, from 5:30-7 p.m. at the University of Minnesota Duluth Kirby Center's Rafters Room. The public can also weigh in at ag.state.mn.us/Health-Care/Transactions/Input.asp or by calling 651-296-3353 (metro area) or 800-657-3787 (Greater Minnesota).