Four years after forging a strategic alliance, the University of Alabama Health System is set to purchase Ascension St. Vincent’s five hospitals and other healthcare sites in Alabama.
UAB Health System CEO Dawn Bulgarella announced during a special board meeting this week that the system will acquire Ascension’s Alabama facilities for $450 million. The University of Alabama’s board of trustees has unanimously approved the purchase.
Ascension, a nonprofit Catholic system, operates 140 hospitals nationwide and has been selling some of its facilities in recent years to stabilize its finances.
The UAB Health System aims to finalize the deal by fall 2024, pending approval from regulators and the Catholic Church.
Bulgarella stated the system plans to run the five hospitals as community hospitals. Patients will continue to see their clinicians, and Ascension St. Vincent employees will retain their jobs.
“It’s important to know that Ascension St. Vincent’s caregivers and associates’ job security is not threatened by today’s news,” Bulgarella said in a news conference Tuesday.
“We look forward to supporting continued operations of community physician practices and providing opportunities for Ascension St Vincent’s caregivers and associates to essentially remain in their current positions without having to reapply for their jobs,” she added. “We are hopeful that most, if not all, of the roughly 5,000 caregivers and associates will remain in their roles.”
Compensation and benefits will remain “comparable” to current levels, Bulgarella assured.
Pledging new investments
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UAB Health also intends to invest in upgrading the facilities.
“UAB will make new and increased financial investments into clinical and other important infrastructure,” Bulgarella said in the news conference.
UAB Health System operates a network of 17 hospitals across Alabama.
Ray Watts, M.D., president of the University of Alabama at Birmingham and chairman of the UAB Health System board, described the acquisition as “an exciting opportunity to combine and optimize our collective strengths.”
“At a time when hospitals are closing across the nation, UAB Health System has made it a priority to strengthen Alabama hospitals,” Watts stated at the news conference.
The UAB Health System will acquire Ascension hospitals in Birmingham, Blount, Chilton, East, and St. Clair. Additionally, UAB Health will take over the One Nineteen Campus, which offers specialty care and rehabilitation services, the Trussville Freestanding Emergency Department, and clinics that are part of Ascension Medical Group.
UAB Health System plans to use “a co-branded model” at the Ascension facilities “to honor and embrace the St Vincent’s people and culture,” Bulgarella said.
UAB Health System and Ascension St. Vincent’s formed a partnership in 2020 with the aim of providing better, more convenient care for patients.
Bulgarella said the UAB Health System and Ascension recently began discussions due to “an increasingly complex healthcare environment.”
“It became clear that a deeper affiliation between Ascension St Vincent’s and the UAB Health System would ensure that the community has sustainable quality healthcare access long into the future,” Bulgarella noted.
Selling facilities
For Ascension, selling the Alabama hospitals follows other recent moves to divest some facilities as the system works to improve its finances. Ascension announced a deal in the spring to sell three hospitals to MyMichigan Health.
Last year, Ascension agreed to transfer Our Lady of Lourdes Memorial Hospital in Binghamton, N.Y., along with its physician practices, to the Guthrie Clinic of Sayre, Pa.
Ascension reported a $3 billion loss in the 2023 fiscal year, followed by a $900 million loss in 2022, leading Fitch Ratings to give the system a negative rating outlook in September 2023.
Based in St. Louis, Ascension has reported more positive financial news thus far in the 2024 fiscal year. For the 9-month period ending March 31, Ascension reported $15 million in recurring operations, compared to a $1.1 billion loss in the same period the previous year.
Ascension has been dealing with a cyberattack that disrupted hospitals and clinics across the system. The attack was reported in early May and caused some hospitals to divert ambulances and delay non-emergency surgeries.
Last year, Ascension Michigan and Henry Ford Health signed an agreement to enter a joint venture and form a new system with a combined $10.5 billion in revenue.
Several Ascension hospitals in southeast Michigan will be joining with Henry Ford, but the systems emphasize it is not a merger or acquisition. The new, expanded organization will be branded Henry Ford Health and based in Detroit.
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