A suburban Chicago hospital owned by St. Louis-based SSM Health Care has averted closure with a last-minute acquisition by a for-profit company that specializes in turning around financially struggling health care facilities.
Just weeks after SSM announced it would close St. Francis Hospital and Health Center in Blue Island, a partnership between Transition Healthcare Co. and a holding company called MSMC Investors agreed to acquire the hospital.
MSMC stands for MetroSouth Medical Center, which will be the name of the new hospital, and is an entity created by Transition and its financial backer Falcon Investors LLC. Officials did not disclose the purchase price or other details of the deal. The chief executive officer of Transition, Arnold Kimmel, will take over as CEO of the hospital.
The move means that the hospital and health center’s roughly 1,500 employees will keep their jobs and that SSM Health Care will shed a facility that was a challenge to the system over the last few years. St. Francis’ operational losses — $40 million since 2002 — have been a key credit concern for SSM, which carries nearly $1.1 billion of debt. St. Francis is currently on track to lose $20 million in 2008, SSM officials said.
In April SSM announced that it would close the 410-bed hospital, which it had been trying to sell — or even give away for free — for a year. 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 SSM said would offset losses at St. Francis.
The Illinois Health Facilities Planning Board will need to approve the transaction.
