St. Luke's, Aspirus finalize deal to join health care systems

DULUTH — Duluth's St. Luke's has finalized a deal with the more expansive Wisconsin-based Aspirus Health, an agreement that will include a $300 million investment over the next three years to fund strategic projects at this city's oldest hospital.

The joint health care system includes 19 hospitals, 130 outpatient locations and 14,000 employees in a region that extends into Michigan's Upper Peninsula. Its headquarters will remain in Wausau, Wis., and Matt Heywood will continue on as the president and CEO of Aspirus.

Nicholas Van Deelen and Eric Lohn will serve as co-presidents with corporate offices in Duluth.

The hospital's name will change to Aspirus St. Luke's in Duluth and Aspirus Lake View in Two Harbors, Minn., likely early this summer. Patients can continue to see the same providers, and the same insurance will be accepted, Van Deelen said.

"I look forward to the impact we will have on advancing technology, expanding rural health care, introducing new insurance products and really approaching our regional in a way that expands health," he told dozens of staff and stakeholders Friday morning in the St. Luke's lobby.

The $300 million investment is for capital projects and technology upgrades.

Aspirus has agreed to honor all physician, labor and union contracts, and maintain local St. Luke's and Lake View as acute care hospitals for at least 10 years from the deal's closing date, Minnesota Attorney General Keith Ellison said in a statement.

He also said Aspirus will keep the current scope of reproductive health care and gender-affirming care.

Ellison has a five-year oversight agreement to make sure the terms are met.

"Health-system mergers tend to follow a pattern," he said. "Systems make promises about improving care and saving patients money, but once the merger is completed, too often systems reduce services, close clinics and charge patients more. I appreciate the commitments that St. Luke's and Aspirus have made in their merger."

The hospital's six labor unions signed letters of support earlier in the process.

Van Deelen said St. Luke's had a well-curated list of "must-haves" when it went in search for a partner, including an alignment of missions and a desire to grow services in this area.

"I am confident that we have found that partner in Aspirus," he said. "We have likeminded cultures and values that are rooted in serving people."

The health care systems signed a letter of intent this past July. Ellison's office hosted a public meeting in October about the planned merger and another between Essentia Health and Marshfield Clinic Health Systems that has since been called off.