Ontario, Calif.-based Prime Healthcare has lined up plans to acquire 12 hospitals this year and is open to the possibility of further acquisitions should the opportunities make sense.
The Illinois Health Facilities and Services Review Board in mid-December unanimously approved Prime's $375 million acquisition of nine Ascension hospitals in the state. The transaction is expected to be completed this quarter, pending approval from the Archdiocese of Chicago since St. Louis-based Ascension is a Catholic health system. The hospitals included in the deal are:
- Ascension Holy Family (Des Plaines)
- Ascension Mercy (Aurora)
- Ascension Resurrection (Chicago)
- Ascension Saint Elizabeth (Chicago)
- Ascension Saint Francis (Evanston)
- Ascension Saint Joseph-Elgin
- Ascension Saint Joseph-Joliet
- Ascension Saint Mary-Chicago
- Ascension Saint Mary-Kankakee
Prime includes the for-profit Prime Healthcare Services and its nonprofit arm, Prime Healthcare Foundation, which operates 14 hospitals. Under the deal, seven Ascension hospitals will become for-profit; St. Francis in Evanston and St. Mary-Kankakee will remain nonprofit.
"Our operating model typically improves profitability margins at acquired facilities, aligning them with those of our mature hospitals," CFO Steve Aleman said on the Becker's Healthcare Podcast. "While transformational change and growth are never easy, everyone at Prime is excited about continuing our successful track record of turning around underperforming facilities. Our goal is to secure these hospitals as vital community assets for generations to come."
Prime, which currently operates 44 hospitals across 14 states, also has plans to sell Lehigh Regional Medical Center in Lehigh Acres, Fla., to Nashville, Tenn.-based HCA Healthcare and acquire Lewiston-based Central Maine Healthcare, a three-hospital system, by the end of the year.
Central Maine Healthcare includes Central Maine Medical Center, Bridgton Hospital, Rumford Hospital, CMH Cancer Care Center and more than 40 physician practices.
If the Ascension, HCA and Central Maine Healthcare transactions close, Prime will increase the number of hospitals in its portfolio to 55 and expand its presence into Illinois, the third-largest metropolitan market in the country.
"We're a big believer in community hospitals and their role in delivery of healthcare. There's many hospitals in distress, and we want to be very thoughtful, very thorough in the review, because there are challenges today that weren't in place many years ago," President and Chief Medical Officer Sunny Bhatia, MD, told Becker's. "We will continue to look at other opportunities if they present themselves and if we believe that the opportunity to turn them around and add value is realistic."