Ascension has officially sold eight of its Illinois hospitals to a California-based health system for more than $370 million.
Prime Healthcare said Saturday that a previously announced deal had closed to buy the hospitals, along with four Illinois senior living and post-acute care facilities and physician practices from Ascension.
The hospitals are all generally keeping their names but without the Ascension branding. The hospitals are: Holy Family Medical Center in Des Plaines, Mercy Medical Center in Aurora, Resurrection Medical Center in Chicago, Saint Francis Hospital in Evanston, Saint Joseph Medical Center in Joliet, Saint Joseph Hospital in Elgin, Saint Mary’s Hospital in Kankakee and Saint Mary of Nazareth Hospital in Chicago.
Saint Elizabeth in Chicago was also part of the deal, but Ascension previously announced plans to close the hospital, which sits on the city’s West Side, has 28 beds and treats acute mental illness. Ascension said in an application to the state Health Facilities and Services Review Board that nearby Saint Mary of Nazareth could take Saint Elizabeth’s patients. Ascension transferred Saint Elizabeth’s services to Saint Mary on Feb. 17, Prime said in a statement.
Until now, the hospitals have been not-for-profit as part of Ascension, which is a large Catholic health system with hospitals across the country. As part of Prime, most of the hospitals are becoming for-profit, while Saint Francis in Evanston and Saint Mary’s in Kankakee will keep their not-for-profit statuses as part of Prime’s affiliated charity called the Prime Healthcare Foundation.
The hospitals will continue to be affiliated with the Catholic Church, Prime said in a news release Saturday.
Prime has offered employment to “substantially all” of the facilities’ workers, and has said it will invest $250 million in the Illinois facilities for upgrades, capital improvements, technology and system upgrades.
“We’re very confident we can turn around these facilities and maintain them as assets to the communities,” Dr. Sunny Bhatia, Prime’s president and chief medical officer, told members of the Illinois Health Facilities and Services Review Board at their meeting in December. “We’re here to stay. … This is what we do. We save distressed community hospitals.”
Bhatia said every hospital that Prime has acquired has been in financial distress at the time of acquisition.
The hospitals are Prime’s first ones in Illinois. Prime has 51 hospitals and nearly 57,000 employees and affiliated physicians across the U.S.
The state Health Facilities and Services Review Board voted unanimously in December to approve the deal.
The approval came despite opposition from the National Nurses United union, which in an October letter to the board, cited, “Prime Healthcare’s history of putting profits over patients, leading to illegal and unethical practices that risk people’s health, in addition to the elimination of crucial health services in the community.”
Dr. Prem Reddy, Prime’s chairman and CEO, agreed in 2018 to pay the government $65 million to settle allegations that 14 Prime hospitals in California knowingly submitted false claims to Medicare by admitting patients to hospitals who weren’t in need of inpatient care, and by billing Medicare for more expensive diagnoses than the patients actually had. In 2021, Prime, Reddy and one of Prime’s doctors agreed to pay $37.5 million to settle allegations that Prime paid the doctor kickbacks for patient referrals, among other allegations.
Prime did not admit any liability as part of those agreements.
Ascension is keeping a number of its other Illinois hospitals for now. Ascension spent nearly two years doing due diligence to make sure Prime was the best buyer for its hospitals, said Ascension Illinois CEO Polly Davenport, at the Health Facilities and Services Review Board meeting in December. She said Ascension decided selling some of its hospitals “was the most reasonable path to ensuring our care continues to flourish.”
Ascension posted a $1.8 billion operating loss for the year that ended June 30, though that was an improvement from the organization’s $3 billion operating loss the prior year.
This is the third time the Ascension hospitals have changed ownership in a decade — a lot of change, even for the Chicago area where hospital mergers and acquisitions are common. The hospitals were once part of Presence Health, and then, in 2018, became part of Amita Health. Ascension and AdventHealth unwound their Amita Health partnership in 2022, and the hospitals were then Ascension Illinois hospitals.