The deal marks the latest effort by the Catholic non-profit to slim down its portfolio.
Ascension is offloading more assets after striking a deal with Prime Healthcare to sell nine Illinois hospitals and four sites of care.
The definitive agreement comes as Ascension works to pare down expenses and narrow its focus in certain markets to achieve profitability.
Meanwhile, the acquisition is the largest in Prime’s history and will see the health system invest $250 million into the properties and no debt put on the hospitals to complete the deal, which is expected to close in the first quarter of 2025.
Prime will take over Ascension Holy Family, Ascension Mercy, Ascension Resurrection, Ascension Saint Francis, Ascension Saint Joseph, Ascension Saint Joseph, Ascension Saint Mary, and Ascension Saint Mary and Saint Elizabeth.
“Prime Healthcare’s Mission and commitment to clinical excellence and health equity will carry on this legacy, ensuring that the greater Chicago area has sustainable, quality healthcare access long into the future,” Polly Davenport, president and CEO of Ascension Illinois, said in the news release.
The sale follows a string of deals by Ascension, including divestures of three Michigan hospitals and an ambulatory surgical center to MyMichigan Health in March. The Catholic non-profit health system also entered a $10.5 billion joint venture with Henry Ford Health last year.
Ascension has been dealing with financial struggles, though the operator has experienced recent improvement. For the first half of 2024, it reported a $237.8 million operating loss, compared to nearly $1.8 billion for the same period in 2023. Challenges with expenses led to Ascension ending 2023 fiscal year with a $2.66 billion net loss.
The deal for Prime allows the system to expand its current fleet of 44 hospitals and more than 300 outpatient locations. In the announcement, the operator said it has “earned national recognition for its unique ability to transform financially struggling hospitals.”
Earlier this year, Prime also acquired five hospitals from Medical Properties Trust for $350 million to grow its presence.
“Our agreement with Ascension reflects our decades-long mission of saving, improving and investing in community hospitals and we are excited to bring these Ascension Illinois facilities into our Prime Healthcare family, preserving our shared values and mutual commitment to patient-centered care,” said Sunny Bhatia, Prime president and CMO.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
Nine hospitals and four additional sites of care are being sold by Ascension to Prime Healthcare, with the transaction expected to close in the first quarter of 2025.
It’s the largest acquisition in Prime’s history, with the system set to invest $250 million into the facilities with no debt put on the hospitals.