Ascension Health, already the largest integrated health system in the U.S. by number of facilities, will grow larger by acquiring Chicago-based Presence Health, the largest Catholic health system in Illinois.
The two systems have signed a letter of intent for the 12-hospital Presence system to join AMITA Health, Ascension’s existing joint venture in Illinois with two systems based out of Chicago’s suburbs: Alexian Brothers Health System and Adventist Midwest Health. All Presence facilities would become a part of AMITA except Presence Life Connections, which would join Ascension’s senior care subsidiary, Ascension Living.
“The mission, values and history of Presence Health clearly align well with those of Ascension, as both systems are dedicated to caring for all, with special attention to persons living in poverty and those most vulnerable,” Ascension President and CEO Anthony Tersigni, EdD, said in a press release. “We believe this will strengthen Catholic healthcare not only in the region but throughout the country as we are all dedicated to delivering personalized, compassionate care.”
Presence holds approximately 10 percent of the Chicago hospital market, though it has struggled financially over the past several years. It posted a $186 million operating loss in 2015, leading to layoffs of 250 employees. It then posted another $40 million loss in 2016, only getting back into the black with an operating gain of $12.4 million in the first quarter of 2017. It had already announced the sale of two hospitals farther away from Chicago, signing a letter of intent earlier in August to sell Presence Covenant Medical Center in Urbana, Illinois, and Presence United Samaritans Medical Center in Danville, Illinois, to OSF Healthcare.
In contrast, Ascension saw its operating income increase by almost 41 percent, to $642 million, with a $990 million increase in net patient service revenue, over a nine-month period ending on March 31. It’s also been expanding, adding the eight-hospital Wheaton Franciscan Healthcare, based in Glendale, Wisconsin, last year.
“Joining Ascension and AMITA Health is a natural evolution for Presence Health, especially given the mutual respect between our systems and our shared mission, vision and values to provide quality, faith-based care,” said Presence Health President and CEO Michael Englehart. “We look forward to working together to engage in this joint effort to expand, and continue to deliver, quality care for our patients and residents, as well as provide additional clinical opportunities and patient care resources to all our physicians and associates.”
Ascension said the deal should be closed early in 2018, though it is subject to regulatory approval. Federal regulators successfully blocked another recent attempt at consolidation in the Chicago market by opposing the merger of Downers Grove, Illinois-based Advocate Healthcare and NorthShore University Health System.