Ascension exits Northwest with sale of Washington hospital
- Ascension has finalized its sale of Lourdes Health Network of Pasco, Washington to Brentwood, Tennessee-based RCCH HealthCare Partners, a for-profit firm.
- Lourdes was the only health system Ascension operated in the state of Washington.
- The reported $21 million deal follows Ascension's sale of an Idaho hospital to RCCH HealthCare Partners a few years earlier, which also represented Ascension's exit from that state. Without the two health systems, Ascension no longer has a presence in the Northwest.
The move by St. Louis-based Ascension, the largest Catholic health system in the country, is in line with the its drive to move away from its hospital-centric focus and instead turn to a long-term strategy targeting population health delivered in outpatient settings.
Just last week, Ascension's Providence Health System in Washington, D.C. fired most of its 12-member board of directors via email as the hospital transitions away from acute care services toward population health efforts. The board members had voted to rescind approval of the transition plan, saying they hadn't realized how extensive it was.
This latest move reflects an ongoing divestiture trend for major health systems looking to shed weight and pare down debt in the face of flattening inpatients admission and other financial headwinds. Community Health Systems and Tenet Healthcare, for example, have sold dozens of hospitals in the past year or so.
Tenet and Ascension have both laid off hundreds of workers as they struggle financially.
For the first nine months of FY2018, Ascension Health reported year-over-year drops in operating income ($282 million from $749 million) and revenue ($17.09 billion from $17.15 billion) as it undergoes restructuring. The system has divested hospitals, cut leadership and dropped ancillary businesses, saving $400 million in administrative costs and hoping to cut $61 million in that area over the next fiscal year.
Exiting an entire regional market could be risky for Ascension, but the chain's shift in business plan is clear. Earlier this year, Modern Healthcare obtained a video of CEO Anthony Tersigni telling employees the company would aim to "transform current healthcare delivery options to meet the challenges presented by the rapidly changing environment." He said the board of directors had endorsed the plan and expected to save $57 million a year by aligning pay practices.
Ascension is still strategically investing in some hospitals, however. In May, the system said it would invest $50 million in three Michigan health systems it had originally planned to sell.