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.