BJC HealthCare and Saint Luke’s Health System signed a non-binding agreement of intent to create a $10 billion nonprofit system with 28 hospitals across Missouri, Kansas, and Illinois.
Richard Liekweg, president and CEO of BJC based in St. Louis, will serve as CEO of the integrated health system if a definitive agreement is reached and the transaction passes the usual regulatory review and approval process. The health system’s board of directors will include representatives from both the BJC and Kansas City, Missouri-based Saint Luke’s.
The systems said they hope to reach a definitive agreement in the coming months and complete the transaction by the end of the year. It will mark the latest merger of the region’s health system, following the proposed mergers between Froedtert Health and Milwaukee-based Neenah, Wisconsin-based ThedaCare and La Crosse, Health Systems Wisconsin-based Gundersen and Green Bay-based Bellin Health completed their deal in November. If the deal closes, BJC and Saint Luke’s will maintain their existing brands and operate from dual headquarters—St. Louis and Kansas City.
Spokespersons for BJC, which primarily operates in central and eastern Missouri, and Saint Luke’s, which primarily operates in the western part of the state, do not have any market overlap between their hospital networks. , a BJC spokesman said. Each system operates 14 hospitals.
The proposed transaction builds on a long-term partnership between BJC, Saint Luke’s, and several other regional health systems. The BJC Partnership, founded in 2012, is designed to improve recruitment and retention, develop the workforce, expand the portfolio of supply chain suppliers, strengthen business cycle management, and more. collect and enhance data analysis.
BJC recorded an operating loss of $48 million on revenue of $6.31 billion in 2022, down from $152.6 million in operating income on $6.02 billion in revenue in 2021. The 2022 data includes a one-time loss charge of $73.4 million.
Saint Luke’s reported $7.3 million in operating income on $2.35 billion in revenue in 2022, down from $147.1 million in operating income on $2.37 billion in revenue in year 2021.
The Federal Trade Commission has increased scrutiny of hospital mergers with overlapping service areas, which is part of the reason why large systems are increasingly looking for merger partners across the country. state. The FTC, which often argues that prices rise after nearby hospitals merge, is often hesitant to challenge cross-market transactions because of antitrust laws that focus on in-state transactions and the existence of money. minimum legal rate for interstate unions.
