Ascension offloads Illinois hospitals, persevering with promoting spree

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Dive Temporary:

• Ascension continues to shrink its footprint within the Midwest, asserting Thursday that IT has signed a definitive agreement to promote 9 Illinois hospitals and 4 care websites to Prime Healthcare. 
• The deal, which is predicted to shut within the first quarter of 2025, will likely be Prime Healthcare’s largest acquisition and its first entry into the Illinois market.
• Prime has dedicated to investing $250 million into the 13 properties and says “no debt will likely be placed on the hospitals to finish this transaction.” Different monetary phrases weren’t disclosed.

Dive Perception:

The deal marks the newest within the string of Midwest divestitures for Ascension. 

The Catholic Health system had a difficult fiscal 2023, when IT battled elevated bills and posted a web lack of $2.7 billion. Throughout the first quarter, the system’s outlook improved because the tempo of expense development slowed.

Nevertheless, administration mentioned Ascension deliberate to shift its focus from hospital companies to ambulatory care and telehealth — service traces that sometimes include decrease overhead prices. 

As Ascension shifts focus, IT’s tightening its hospital portfolio throughout the nation, offloading hospitals in markets starting from Kansas to New York.

Within the Midwest, the system divested three Michigan hospitals and an ambulatory surgical heart for an undisclosed determine in March. Final October, Ascension inked a three way partnership cope with Henry Ford Health to mix right into a $10.5 billion system, rebranding eight of Ascension’s Michigan acute care hospitals to function beneath the Henry Ford title.

Prime is about to amass Ascension Holy Household, Ascension Mercy, Ascension Saint Francis, Ascension Saint Joseph hospitals in Joliet and Elgin, Ascension Resurrection, Ascension Saint Mary in Kankakee and Chicago, and Ascension Saint Elizabeth.

The Prime deal will roughly halve Ascension’s Illinois hospital portfolio, leaving the Health system with 12 hospitals and care services within the state, in accordance with an organization spokesperson.

Ascension suffered a cyberattack earlier this yr, nonetheless, the occasion possible is unrelated to present divestitures. Analysts from credit standing company Fitch Scores characterised the Health system as having “very sturdy liquidity” and a leverage place that gives “important cushion” for one-off occasions, akin to cyberattacks.

In the meantime, Prime has sought to develop. Earlier this yr, IT bought 5 hospitals from Medical Properties Belief for $350 million.

The Health system presently operates 44 hospitals and 300 outpatient websites throughout 14 states, and a spokesperson mentioned the corporate has been trying to enter the Illinois market.

Prime mentioned IT has a repute for “its distinctive potential to rework financially struggling hospitals” and plans to supply employment to “considerably all associates” upon the deal closing.