Ascension is selling off another four of its hospitals, this time to Indiana-based nonprofit Beacon Health System.
The deal unveiled Thursday is expected to close this summer, pending regulatory approvals, and involves the hospitals and other facilities of Ascension’s Southwest Michigan Region.
Upon closing, Beacon will grow its system to 11 hospitals, around 190 total care sites and about 10,800 employees, and mark a clear expansion into Michigan where it so far does not operate a hospital.
“Expanding our reach deeper into southwest Michigan broadens access to high-quality, affordable care for communities served by Ascension, extends our service area and provides growth opportunity to further strengthen the health system,” said Kreg Gruber, Chief Executive Officer of Beacon Health System. “This acquisition will create a bright future for these communities by ensuring access to quality healthcare services for generations.”
Financial terms of the deal were not disclosed. It includes the Ascension Borgess Hospital, Ascension Borgess Allegan Hospital, Ascension Borgess-Lee Hospital and Ascension Borgess-Pipp Hospital.
Beacon said it will bring the hospitals under its brand and give all clinicians and employees an employment offer “provided they follow Beacon’s hiring process and meet the legal requirements to work.” The parties said they’re aiming for a smooth handoff with no or minimal care disruptions, with Beacon adding it plans to “keep the commitments” Ascension has made to the local community.
More broadly, Beacon said it is pursuing the deal to improve efficiency with scale, and to grow its service lines including specialty care services.
Ascension is a Catholic nonprofit and one of the largest health systems in the country, but has been working to tighten its belt through tighter operations and divestitures, most recently through a $370 million eight-hospital sale to Prime Healthcare. The system logged a $1.4 billion loss from recurring operations (-4.9% recurring operating margin), a $1.8 billion operating loss (inclusive of impairment and nonrecurring losses) and a nearly $1.1 billion net loss during the fiscal year ended last June.
This isn’t the first time Ascension has looked to its Michigan hospitals for a sale. Last year, it handed off three of its hospitals in the northern part of the state to MyMichigan Health and brought eight others in southeast Michigan into a joint operating venture with Henry Ford Health.