Ascension Health to sell St. Francis Hospital to for-profit chain
Ascension health system is selling nine of its Illinois hospitals, including Ascension St. Francis, to Ontario, California-based Prime Healthcare. If the deal goes through, it will mark the first time in its 104-year history that St. Francis wouldn’t be owned by a Catholic entity.
According to Crain’s Chicago Business, the deal has been in the works for the past two years and is expected to be completed by the first quarter of 2025. The deal must be approved by the Archdiocese of Chicago and the Illinois Health Facilities & Services Review Board. While Prime has hospitals in 14 states, including Indiana and Michigan, it currently has no location in Illinois.
The deal comes as Ascension struggled financially, ending its 2022-23 fiscal year with a $2.7 billion net loss. The health system outsourced its “hospitalist” employees earlier this year and laid off another 100 employees last week. The joint press release issued for the two health systems said that Prime “agreed to make offers of employment to substantially all associates.” Chicago Tribune quoted a Prime spokeswoman as saying this means employees would need to reapply for their jobs.
Prime includes the for-profit Prime Healthcare Services and an affiliated charity, called the Prime Healthcare Foundation, under which 14 of Prime’s hospitals operate, the Tribune wrote.
Prime in top metro areas
According to the joint statement, the major advantage of the deal is that Prime will have presence in nation’s third-largest metropolitan area. It already has presence in New York City and Los Angeles metropolitan areas. Ascension will still retain Ascension St. Joseph in Chicago proper and several suburban hospitals.
Prime describes helping struggling hospitals as an important part of its mission. According to its website, founder Dr. Prem Reddy originally sold what would become the health system’s first hospital to another provider, only to buy it back after the hospital “faltered” under the new ownership.
“In 2001, Dr. Reddy formed Prime Healthcare Services to re-purchase the hospital, rescuing it from bankruptcy and setting the standard for quality healthcare that continues throughout the hospital network to this day,” the site says. “Prime Healthcare’s motto is ‘Saving Hospitals, Saving Jobs, Saving Lives’ which the company continues to do as it grows.”
The website touts investments in hospitals Prime buys, mentioning that ”millions of dollars are initially invested in newly acquired hospitals” and that “average capital investment in a newly acquired hospital for equipment in the first year alone is $20 million.” The joint statement mentioned that Prime committed to investing $250 million in facility upgrades, capital improvements, substantial technology investments and system upgrades” for all nine hospitals it plans to buy, but doesn’t mention how much of it would apply to St. Francis specifically.
Charity care
The statement also indicated that Prime “will continue and expand services based on community needs, and will continue charity care and community benefit programs, preserving the facilities’ roles as valued community partners.”
Ascension faced concerns about understaffing and low pay, which were exacerbated by the outsourcing announcement. Prime Healthcare faced similar accusations, something that unionized workers at four of its California hospitals went on a five-day strike over back in October 2023.
Both health systems emphasized the importance of the charity care and community giving.
“Ascension Illinois has been committed to our Mission of serving all persons, with special attention to those who are most vulnerable,” said Polly Davenport, president and chief executive officer of Ascension Illinois. “Prime Healthcare’s Mission and commitment to clinical excellence and health equity will carry on this legacy, ensuring that the greater Chicago area has sustainable, quality healthcare access long into the future.”
“Our agreement with Ascension reflects our decades-long mission of saving, improving and investing in community hospitals and we are excited to bring these Ascension Illinois facilities into our Prime Healthcare family, preserving our shared values and mutual commitment to patient-centered care,” said Dr. Sunny Bhatia, president and chief medical officer of Prime Healthcare. “Like Ascension, Prime Healthcare has a strong tradition of ensuring health equity and social responsibility. This transaction will enable a continuation of this tradition and expand our dedication to compassionate care, clinical excellence, and service to patients and the greater Chicago community.”
St. Francis Hospital, 355 Ridge Ave., was founded in 1900. It has gone through several owners over the last few decades. Most recently, it was owned by Presence Health, which Ascension acquired in 2018. At the time, Ascension operated its Chicago-area hospitals as a joint venture with AdventHealth under the AMITA Health brand, so St. Francis was rebranded to “Amita Health Saint Francis Hospital.” When the joint venture was dissolved effective April 1, 2022, it was rebranded again, this time with the Ascension name.
Prime Healthcare is expected to retain St. Francis’ name, minus “Ascension.”
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