Ontario, Calif.-based Prime Healthcare has grown significantly since Founder, Chair and CEO Prem Reddy, MD, launched the health system in 2001. Now it is preparing to acquire nine Illinois hospitals from St. Louis-based Ascension in what would be the largest acquisition in the health system's 23-year history.
The proposed transaction, expected to close in the first quarter of 2025, would increase the number of hospitals in Prime's portfolio to 53. It would also expand the health system's presence into the third-largest metropolitan market.
"With this historic transaction, Prime Healthcare's Midwest region will become one of the largest in the system," President and Chief Medical Officer Sunny Bhatia, MD, told Becker's. "This transaction is unique in that it provides scale and therefore opportunity to create significant benefit to communities, patients and Illinois."
Dr. Bhatia highlighted the health system's track record of improving financially struggling hospitals at a time when the industry is facing ongoing financial and workforce challenges and widespread consolidation.
"We are committed and uniquely able to improve, invest and ensure the continued legacy of service of these hospitals, having saved and transformed over 40 hospitals across the country," he said. "While Illinois would be a new market for us, there were a lot of similarities and parallels with other communities we've entered in Los Angeles and the Northeast, and we understand the vulnerable patient populations some of these hospitals serve in the Greater Chicago area."
Prime has committed to invest $250 million in facility upgrades, capital improvements, technology investments and system upgrades at the nine hospitals, which include:
- 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
Dr. Bhatia insists that "healthcare is local," and that the smooth and successful integration of these facilities starts with speaking to hospital leaders.
"We first learn about the hospitals, their legacies, keeping healthcare local and supporting them with a larger system that has done this over 40 times," he said. "We also infuse capital around systems, technology, protocols, processes to ensure they're practicing at their highest level and following guideline-based medicine. Then you start to see efficiencies and improvement in outcomes and quality metrics."
As a physician-founded and physician-led system, Prime said it maintains a constant focus on clinical care to improve quality, operational efficiencies and the patient experience. Investments will focus on enhancing care and operational performance through facility improvements and new technologies or systems.
Part of Prime's integration plan includes converting all nine hospitals to its iteration of the Epic EHR system to drive synergy and quality.
"Operational improvements also stem from economies of scale and the ability to share resources and best practices across a national system," Dr. Bhatia said. "Most importantly, we define successful integration by raising the quality of care delivered, advancing equity and access, and expanding service to communities. Prime is committed to the long-term success and service of every hospital that is part of our system and has never closed a hospital."
Dr. Bhatia said Prime often introduces or expands service lines that hospitals put on the back burner or delayed, such as behavioral health programs, advanced cardiac programs, or comprehensive stroke programs, which the health system has established and expanded at multiple hospitals.
The 44-hospital system is in a strong financial position and is expected to close the transaction with its current finances — without adding any debt to the nine hospitals, according to Dr. Bhatia.
Prime is preparing to welcome the nine hospitals into the system in the first quarter of 2025, pending regulatory approvals and closing conditions, but it is not dismissing the possibility of further hospital acquisitions should the opportunities make sense.
"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, when we were growing at a rapid clip," Dr. Bhatia said. "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."