St. Joseph Medical Center in Kansas City and St. Mary’s Medical Center in Blue Springs will become properties of HCA Midwest Health System, part of the nation’s largest for-profit hospital chain.
HCA announced early today that it is buying the two nonprofit hospitals for an undisclosed sum from Ascension Health, owner of Carondelet Health, which has operated both facilities since 2002.
The acquisition bumps the number of HCA full-service, in-patient hospitals in the Kansas City region to 10, rivaling St. Luke’s Health System. HCA Midwest will have about 10,000 employees in the region.
HCA will control about one-fourth of the area’s hospital market share, based on patient admissions.
The transaction includes Carondelet Home Care, Carondelet Cardiology Services, Carondelet Health Resources, Carondelet Medical Enterprises, Carondelet Occupational Health, Wellness and Education Services, Carondelet Health Pharmacy, Carondelet Physicians Services, South Kansas City Surgery Center and St. Mary’s Surgical Center.
M.L. Lagarde, president of HCA Midwest, said the company is “looking forward to securing required regulatory approvals and finalizing the sale.”
The transaction is expected to be completed by the end of the year.
The specific terms of the asset purchase agreement were not released.
The expected purchases, as first reported by The Kansas City Star in October 2012, have been under negotiation for months. The sales follow a national trend of consolidated hospital ownership as smaller hospital groups prepare to handle the demands of federal health care legislation.
A federal quality improvement initiative imposes financial penalties if patient readmissions exceed national Medicare averages. Smaller hospital organizations are scrambling to gain access to more capital and other resources to help them meet the new patient care standards.
Hospitals also are consolidating ownership to help pay for required electronic health records systems and to help absorb losses for uncompensated patient care.
HCA provides the needed deeper pockets to help St. Joseph and St. Mary’s compete, but the sales haven’t found universal favor.
Patrons of St. Mary’s, in particular, have mounted public awareness campaigns, worried that HCA might close the Blue Springs hospital because it already operates Centerpoint Medical Center in Independence and Lee’s Summit Medical Center — both within a few miles of St. Mary’s.
St. Mary’s and St. Joseph, which together have 450 beds and 900 physicians, represent about 6 to 7 percent of patient admissions in the metro area.
HCA Health Midwest also owns Allen County Hospital, Belton Regional Medical Center, Centerpoint Medical Center, Lafayette Regional Health Center, Lee’s Summit Medical Center, Menorah Medical Center, Overland Park Regional Medical Center and Research Medical Center. It operates but does not own Cass Regional Medical Center.
Ascension Health will retain ownership of Carondelet Manor, Villa St. Joseph, St. Mary’s Manor and the two hospital foundations.
The history of St. Joseph dates to its founding in 1874 by the Sisters of St. Joseph of Carondelet. St. Mary’s dates to a 1905 founding by the Franciscan Sisters of Mary.
The two hospitals are the second pair of Kansas City area hospitals founded by Catholic nuns to be sold to for-profit companies this year.
Providence Medical Center in Kansas City, Kan., and St. John Hospital in Leavenworth were sold earlier this month by the Sisters of Charity of Leavenworth Health System to Prime Healthcare Services. That also was a transfer of nonprofit hospitals to a for-profit chain.
St. Joseph and St. Mary officials have said that maintaining their Catholic heritage was an important element in negotiations with HCA.
“HCA Midwest Health System intends for Carondelet Health to continue operating in accordance with the Ethical and Religious Directives for Catholic Health Care Services,” said Fleury Yelvington, chief executive officer of Carondelet Health.