SSM Health continues consolidation trend with CSA purchase
- SSM Health has signed a letter of intent to acquire a health system and clinic from the Wisconsin-based Congregation of Sisters of St. Agnes, Modern Healthcare reports.
- Under the agreement, SSM Health will assume control of Agnesian HealthCare based in Fond du Lac, Wis., and the Monroe Clinic in Monroe, Wis., for an undisclosed sum. Both SSM and CSA are Catholic-sponsored providers.
- Changes in the Wisconsin payer and provider markets combined with changing demographics of CSA led to the decision, officials said in a press release. The undisclosed deal is expected to close in January, pending regulatory approvals.
SSM previously acquired St. Louis University Hospital from Tenet Healthcare in 2015, fulfilling a goal of adding an academic medical center to its network. The deal allowed the health system to compete directly with BJC HealthCare, which owns another St. Louis academic medical center, Barnes-Jewish Hospital.
Based in St. Louis, SSM operates 20 hospitals in four Midwestern states. Including three hospitals in south central Wisconsin.
The deal continues the consolidation trend in the hospital industry, as providers cope with changing regulatory and market forces brought about by the Affordable Care Act and the shift to value-based reimbursement.There has been a steady stream of M&A deals in the past year. In December, Wayne Healthcare, the last independent hospital in southwestern Ohio, announced plans to partner with Premier in a move to reduce costs and grow efficiencies. The joint venture received final approval in March.
The financial climate has been trying for nonprofit and for-profit hospitals alike. A Health Affairs report last year found most of the 3,000 health systems surveyed lost money on patient services, and profitability was tied to the health system’s size, location, ability to scale and local market share. And a recent survey from the American Hospital Association found mergers often lead to cost savings.