Dive Brief:
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KU Health System CEO Bob Page submitted a letter to SCL Health CEO Mike Slubowski about the proposal to buy SCL’s St. Francis Hospital in Topeka, KS. The plan involves buying the hospital and operating it with Ardent Health Systems, a for-profit hospital chain with 19 hospitals in six states, reported The Kansas City Star.
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The arrangement with Ardent Health would “mirror KU’s relationship with Hays Medical Center.” KU Health and Hays Medical are separate entities that combine financial statements and share resources, reported The Kansas City Star.
- In promoting the partnership, Page wrote the KU Health System knows “how to work with doctors, nurses, and caregivers to provide quality care,” while Ardent Health Services is “one of the most experienced joint venture management teams in the nation.”
Dive Insight:
The possible sale is just the latest piece of hospital M&A activity. A recent report from Pricewaterhouse Coopers found healthcare M&A volume was up 0.9% in Q1 this year, while value was down by 49.3%.
Hospital M&A activity is up this year as health systems look to find ways to survive or expand their footprint.
The St. Francis sale wouldn’t be Ardent Health’s first recent buy. The health system purchased LHP Hospital Group in March. The LHP Hospital group included five facilities in four different states.
SCL Health, based in Broomfield, CO, put St. Francis Hospital up for sale last year. SCL Health announced on April 18 it planned to close the hospital this summer, but said they would officially announce the hospital's fate by the first week of May.
SCL Health said St. Francis Hospital lost $117 million over the past five years. In its April 18 announcement, SCL Health pointed to reasons for the loss – fewer patients at St. Francis Hospital, Kansas didn’t expand Medicaid, and uncompensated and charity care more than doubled between 2012 and 2016.