Aurora Health Care announced Tuesday it is buying Advanced Healthcare and will build a hospital and medical office building near the intersection of I-43 and Highway 60 in Grafton just a few miles away from Columbia St. Marys Ozaukee Hospital in Mequon.

Several sites in the I-43 corridor are being considered for the hospital, which will be developed in the Village of Grafton, officials said.

Nick Turkal, chief executive officer of Aurora Health Care, said the hospital will be a full-service, regional medical center with between 80 and 90 beds, a 24-hour emergency room, Vince Lombardi Cancer Center, a vision center, retail pharmacy and other services. It will employ about 600 people and could open as soon as 2009, he said.

The new hospital, which is envisioned as a non-profit entity, will provide a choice for patients, said Gene Monroe, president of Advanced Healthcare, who noted that Ozaukee County is the only county in southeastern Wisconsin with only one hospital.

It will also allow both Advanced Healthcare and Aurora to reach their goal of creating an integrated health-care system.

We firmly believe that the best and most cost-effective way to deliver care is through an integrated health-care system that is, a health-care provider that coordinates patient care across a broad spectrum of services, Turkal said. To make this happen, we must have a complete continuum of services in place, including a hospital.

Because physicians, pharmacists and others will be part of the same system, Turkal said, patients will find it easier to get quality care.

Auroras plan to build a Grafton hospital was criticized as an unnecessary move by the head of Columbia St. Marys.

Ozaukee County is not an underserved county by a long shot, said Leo Brideau, president and chief executive officer of Columbia St. Marys. Whats been demonstrated over and over and over is when you build unnecessary capacity, it drives up the cost of health care. It simply makes no sense.

What youre going to have for a long period of time is two underused hospitals three miles apart battling for patients, and the community wont benefit. I think its really unfortunate for the community.

Brideau said Aurora is a fierce competitor, but added many patients are likely to remain loyal to Columbia St. Marys.

Weve worked very hard to build patient loyalty, he said. Weve had a lot of patients indicate to us that if this happened they would leave Advanced Healthcare.

Columbia St. Marys, the successor to St. Alphonsus Hospital in Port Washington, opened its Mequon hospital with 82 beds in 1994. Since then, the hospital, which is in the midst of a building project, has been expanded several times.

When the current $72 million project is completed later this year, the hospital will have 185 beds and the space for another 64 beds to be added in the future.

Although the hospital proposed by Aurora would be smaller than Columbia St. Marys Ozaukee Hospital, Turkal said it fits with Auroras practice of building a small to mid-size hospital and expanding it when needed.

Tuesdays announcement that Aurora will purchase Advanced Healthcare was almost overshadowed by the announcement of the new hospital.

We had to have a strategic partner who saw the world as we do, Monroe said. We found that in Aurora. They share our belief that integrated care is the best way to deliver quality service and control costs.

Advanced Healthcare has been courted by several health-care providers, but Aurora was the clear front-runner. The sale was approved by roughly 90% of the 192 physician stockholders of Advanced Healthcare in voting that ended Monday, Monroe said.

Turkal declined to announce the price Aurora will pay for Advanced Healthcare. The deal is expected to be completed by Jan. 1.

Advanced Healthcare will become a separate entity within Aurora Health Care, Monroe said. Its management team will remain intact to oversee continued operations at the 14 clinics it operates, he said, adding that work will begin on an expansion of the Cedar Creek Clinic in Grafton this fall.

The only exception may be in Port Washington, where Aurora and Advanced Healthcare operate clinics within a few blocks of each other on the west side of the community, Monroe said.

The Port situation is unique, he said. The organization will consult with the physicians who practice there to determine the fate of the clinics.

Monroe said 44,000 people in Ozaukee County receive their care from Aurora or Advanced Healthcare, including 70% of Grafton residents.

Ozaukee County, which is one of the wealthiest in the country and has an aging population, is seen by many as an attractive place for health-care providers.

Grafton was selected as the home for the new hospital for several reasons, Monroe and Turkal said. It is roughly midway between Auroras medical centers in Sheboygan and downtown Milwaukee. About half the Advanced Healthcare physicians work in the North Shore or Ozaukee County, they noted.

In addition, Grafton is a growing community that is establishing itself as a regional center, they said.

Its been a magnet for retail and commercial growth, Turkal said. When you think of adding into the mix a hospital, its going to be a wonderful thing.

Grafton was also home to Advance Healthcares first satellite clinic, Monroe noted.

We think thats the hub of growth in Ozaukee County, he said.

Grafton Village President Jim Brunnquell said he believes the hospital is a good fit for the community, noting it will provide many well-paying jobs and opportunities for partnerships with the village and schools.

Our whole focus, our vision, has been to become a full service community that provides retail, commercial and industrial opportunities for our residents and visitors, he said. This makes us more of a complete community.

Brunnquell said the village has been talking to Aurora and Advanced Healthcare for several months. Preliminary talks have begun on a development agreement for the hospital that will outline everything from a payment in lieu of taxes to a determination of who will pay for infrastructure.

He said officials need to look not at the debate over health care but at the benefits the hospital will provide for the community.

What Im looking at is whether this is the right endeavor for the residents and citizens of Grafton, he said.

So far, Brunnquell said, the answer is yes.