SSM to Shut St. Francis

After being on the selling block for nearly a year, a financially struggling Chicago-area hospital run by St. Louis-based SSM Health Care could close as early as this month.

SSM put St. Francis Hospital, located in the southern Chicago suburb of Blue Island, up for sale last June, and in late October announced it was close to selling the 410-bed facility to a for-profit startup company and its private equity partner.

That deal never went through, however, and last week the health care system announced it would close the 410-bed hospital. SSM said it had met with 28 potential buyers, and had even offered to give the hospital away for free and assume its $40 million in outstanding debt — but still had no takers.

“All potential buyers said the same thing,” SSM’s chief executive officer, Sister Mary Jean Ryan, said in a statement. “No one could do a better job of operating this hospital than it is currently being operated.”

SSM will continue to pay debt service on St. Francis’ outstanding bonds, said spokesman Chris Sutton.

St. Francis’ operational losses — which amounted to $40 million since 2002 — have been a key credit concern for SSM, which carries nearly $1.1 billion in debt. St. Francis is currently on track to lose $20 million in 2008, according to SSM officials.

SSM blamed the hospital’s seven straight years of losses in part on the growing number of Medicaid and uninsured patients, saying that one out of every two patients coming to the emergency room has no insurance.

Last year state regulators rejected SSM’s bid to build a sister hospital for St. Francis in a nearby suburb that the system said would offset St. Francis losses. Founded in 1905, St. Francis has more than 1,400 employees and 50 employees with the nearby SSM Home Care and Hospice, which SSM said it would also close if no buyers were found. The hospital will remain open until SSM receives the necessary approvals for its plans from the Illinois Health Facilities Planning Board and the Illinois Department of Health.

SSM owns, operates or is affiliated with 20 acute-care hospitals across four states.

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