- The University of Kansas Health System and Ardent Health Services announced Thursday a joint venture to acquire Topeka, KS-based St. Francis Health, a 378-bed hospital owned by SCL Health.
- The news follows SCL’s acceptance of mid-April proposal by KU Health to buy the hospital and operate it with Nashville-based Ardent Health, a for-profit hospital chain with 20 hospitals in six states.
- Over the last five years, St. Francis has lost $117 million, and without Medicaid expansion, uncompensated and charity care more than doubled, according to SCL. Physician clinic losses amounted to $31 million last year alone, and SCL officials had acknowledged the hospital wasn’t sustainable in today’s challenging hospital environment.
The deal will allow St. Francis to remain open and maintain employment for its 1,600-strong workforce, the organizations said. As part of the agreement, the joint venture will provide $50 million in capital funding during the first year.
Terms of the deal, which still needs to be finalized, were not disclosed.
The sale comes amid a flurry of hospital M&A activity as hospitals and health systems look to survive in an uncertain financial market or expand their brand footprint. According to a recent Kaufman, Hall & Associates report, hospital deals in the first quarter of 2017 were up 8%, compared to last year, with 27 transactions so far. Among them were three mergers involving nonprofits: Beth Israel Deaconess Medical Center and Lahey Health, UPMC and PinnacleHealth System, and Fairview Health Services and HealthEast Care System.
In announcing the joint venture to acquire St. Francis Health, UK Health CEO Bob Page said the plan provides a “positive path forward” for the troubled community hospital. “By marrying our resources as an academic medical center and Ardent’s operational expertise, we secure the long-term sustainability of St. Francis Health,” he said in a statement.