Any new acquisition targets right here might be off-limits for a big system like 26-hospital Advocate Aurora Well being because of antitrust issues. And 6-hospital NorthShore seemingly is concentrated on its lately introduced merger with three-hospital Edward-Elmhurst Well being.
In the meantime, the Rush College System for Well being has been expanding into AdventHealth’s west suburban territory. After which there’s Northwestern, which added Palos Well being this yr.
A rising Catholic chain like Peoria-based OSF HealthCare might look to soak up among the Ascension-owned hospitals, sources say. Along with coming into the native market final yr when it merged with Little Company of Mary Hospital in south suburban Evergreen Park, OSF already runs two former Presence Well being hospitals, which it acquired in 2018 simply earlier than Ascension scooped up the opposite 10.
Northwestern declines to touch upon such hypothesis. Advocate Aurora says “it’s commonplace in at the moment’s surroundings for all suppliers to be having conversations, however there haven’t been any formal discussions.” And NorthShore says it is “at all times potential alternatives within the market that permit us to offer the best high quality care and companies to our sufferers and communities.” Rush and OSF didn’t reply to requests for remark.
Amita’s homeowners haven’t indicated that any of the hospitals are up for grabs. In actual fact, they’ve mentioned little or no concerning the impending separation—together with how lengthy it’s going to take to completely unwind the partnership and whether or not its 52,000-member accountable care group will stay intact.
Nonetheless, in an Oct. 21 joint assertion, Ascension and AdventHealth mentioned there can be “no disruption to affected person care.”
Dwindling affected person volumes in recent times have led Amita to consolidate sure service traces at some amenities to save cash on surgical gear, area and employees. Whereas the cost-cutting technique additionally is meant to enhance care by growing affected person quantity at choose amenities, it’s unclear what impact the cut up can have on such adjustments.
Amita reported about $3.6 billion in 2020 working income—roughly one-quarter of which was attributable to AdventHealth. The 46-hospital chain mentioned in a current submitting that its 4 Amita hospitals accounted for about 7% of the system’s $12.6 billion in working income final yr. In the meantime, 146-hospital Ascension mentioned in a current memo to bond buyers that its 15 Amita hospitals accounted for about 12% of the system’s $27.2 billion in working income for the fiscal yr ended June 30.
Offered the joint working firm made good working adjustments and divested companies that weren’t worthwhile, “they’ve in all probability created some runway for themselves,” Smith says.
However issue within the time spent integrating 10 Presence hospitals and navigating leadership turnover, adopted by the pandemic response, Amita won’t have had a lot time to place itself for the longer term.
Even so, business observers agree that many Amita hospitals are interesting acquisition targets for the area’s increasing chains.
“Do I believe they’re sturdy sufficient to function on their very own? Sure, these are two fairly good organizations which might be well-run nationally,” says Brian Sanderson, managing principal of Crowe’s healthcare companies group. “It is going to come all the way down to whether or not they wish to proceed the funding on this space.”
AdventHealth operates “in some fairly good payer combine areas and they also had been able of relative power prior” to the formation of Amita, Sanderson says. “If the water of mergers and acquisitions is rising, it’s a query of whether or not the island they felt protected on earlier than has develop into too cramped.”
In such a case, AdventHealth might look to type a brand new joint working firm with one other faith-based group right here, sources say, pointing to the success of its 25-year-old three way partnership with CommonSpirit Well being, Centennial, Colo.-based Centura Well being. Whereas CommonSpirit’s nationwide workplace is situated in Chicago, the 140-hospital chain doesn’t have any hospitals or clinics in Illinois.
Keith Parrott, who joined Amita as CEO in January 2020, will lead Ascension’s native hospitals and clinics whereas Thor Thordarson, at present Amita’s chief working officer, will lead AdventHealth’s native hospitals and clinics.
This story first appeared in our sister publication, Crain’s Chicago Business.
