Ascension Illinois wrapped a $370 million-plus deal to hand off several of its hospitals and other assets to Prime Healthcare.
The deal was announced last July and originally included nine hospitals, though one of those—Ascension St. Elizabeth—has been shut down following the January approval from a state review board. The parties had negotiated a purchase price of $5 million for Ascension St. Elizabeth, the hospital Prime hopes to close.
As of March 1, the other eight Ascension Illinois hospitals, four senior living and post-acute care facilities and some physician practices have now joined Prime Healthcare, the for-profit system announced Saturday. The deal required review from Illinois regulators, the Archdiocese of Chicago and the Vatican.
“Prime Healthcare is honored to welcome these hospitals into our award-winning system, building upon our legacy of transforming healthcare and preserving access to life-saving services,” Sunny Bhatia, M.D., president and chief medical officer of Prime, said in Saturday's announcement.
Prime says it "has earned a national reputation for turning around financially struggling hospitals" during its 24-year history. Bhatia said the system has similar plans for the new acquisitions, and that "we embrace this opportunity to improve wellness for generations to come."
Prime Healthcare said it has made employment offers "to substantially all associates" at the facilities. The system said it will be maintaining charity care programs and highlighted the $250 million investment commitment it made at the deal's outset, which is slated to support facility upgrades, capital improvements, technology investments and system upgrades.
Prime now comprises 51 hospitals, over 360 outpatient locations and almost 57,000 employees and affiliated physicians after the largest purchase in its history. Of note, two of the included hospitals—St. Mary's Hospital and Saint Francis Hospital—will be under the control of nonprofit subsidiary the Prime Healthcare Foundation. Acquired hospitals will retain their affiliation with the Catholic Church.
“Prime Healthcare’s acquisition of these hospitals will help ensure that our Illinois communities receive the treatment and services they need in a setting that upholds the dignity of the human person," Deacon Gerald Keenan, of the Archdiocese of Chicago, said in the announcement. "Together, we look forward to maintaining a healthcare environment that not only heals the body but also nourishes the soul.”
Ascension's hospital sell-off comes as the nonprofit giant works to tighten its operations.
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. Though still reporting a $313 million loss from recurring operations halfway through its next fiscal year, the organization recently touted a $515 million year-over-year improvement in net income and rebounding volumes in the wake of a costly cyberattack.