Many people who spoke at a Saturday town hall meeting were leery of what the impending sale of Ascension Saint Francis Hospital to Ontario, California-based Prime Healthcare would mean for patients.
The town hall, organized by Mayor Daniel Biss and Rep. Robyn Gabel, was held at the Levy Senior Center and lasted nearly two hours. Attendees said they were worried about how the changeover would impact patients’ access to doctors, mental health care and women’s health services. There were also worries about how the deal would affect existing arrangements with mental health service and addiction treatment providers.
The hospital’s current owner, the Ascension Health system, is selling its nine Illinois hospitals to Prime to focus their resources on their remaining Illinois hospitals, according to Julie Mirostaw, Ascension Illinois’ chief advocacy officer. Officials from both health systems said they still need to clear one regulatory hurdle — the approval of the Illinois Health Facilities & Services Review Board. HFSRB is currently expected to consider the request at its Dec. 17 meeting, but the two hospital systems have already begun preliminary stages of the transition. Most notably, all employees are being asked to reapply for their jobs, with Fred Ortega, Prime’s director of government relations, saying employees will retain their seniority if hired.
Ortega said Prime hopes to complete the deal in the first quarter of 2025.
First acquisition in Illinois
Prime says helping struggling hospitals is an important part of its mission. According to its website, founder Dr. Prem Reddy originally sold what would become the health system’s first hospital to another provider, only to buy it back after the hospital “faltered” under the new ownership.
Since its founding, Prime has grown to 14 states. The acquisition of Ascension Saint Francis would be its first location in Illinois.
Saint Francis has been owned by Catholic entities since its founding in 1900, while Prime Healthcare is a for-profit network. But the hospital would retain its nonprofit status because it would fall under the Prime Healthcare Foundation, an affiliated nonprofit that already runs Prime’s 14 not-for-profit hospitals. Ortega assured the attendees that spiritual care and other religious components of Saint Francis will remain.
The website touts investments in hospitals Prime buys, mentioning that ”millions of dollars are initially invested in newly acquired hospitals” and that “average capital investment in a newly acquired hospital for equipment in the first year alone is $20 million.” The initial announcement of the sale mentioned that Prime would invest $250 million in facility upgrades, capital improvements, substantial technology investments and system upgrades” for all nine hospitals it plans to buy, but didn’t mention how much of it would apply to St. Francis specifically. Ortega said that he still couldn’t give the breakdown, but he expected “the money will be spent fairly quickly,” probably within five years.
Prime controversies
Like Saint Francis, Prime has faced accusations of understaffing and low pay, which union workers at four of its California hospitals alleged during a five-day strike in October 2023. Prime also faced allegations of Medicare fraud and accepting kickbacks in California. In both cases they settled out of court with substantial payments.
One of the attendees at the Saturday town hall meeting asked Ortega if “Prime Healthcare learned its lesson” and what the system is doing to avoid Medicare fraud in the future.
“What I can tell you is that, in those cases that were brought up, they were settled with the government with no admissions of fault,” he responded, adding that the settlement “imposed a corporate integrity agreement” and that subsequent audits have not flagged any issues.
“Many systems like ours, instead of attempting to fight those issues with the federal government, settle and move on,” Ortega added.
Biss interjected that, while he was personally no expert in Medicare fraud law, Ortega’s comments at an earlier meeting fell short of admitting responsibility. Ortega reiterated Prime was under a settlement agreement with the federal government.
“So, if putting those guardrails in place means we learned our lesson, then we learned our lesson,” he said.
Charity care another concern
Attendees pressed Ortega on how Prime would invest the money, with one speaker expressing incredulity that, months into the sales process, it still didn’t know what kind of issues it might be facing.
“Our teams were not able to come in and assess those needs until [the asset-purchase agreement] was signed,” he said. “It wasn’t signed until end of July/beginning of August.”
Since then, Ortega said, they were able to draw some conclusions based on available data, but he added he couldn’t “get into the weeds.”
Mirostaw said that “what Fred and I can commit to is keeping the community as informed as possible” throughout the process.
Another concern was how the change of ownership would affect Saint Francis’ charity care, the health services provided to patients who don’t have health insurance or are under-insured. Under state law, hospital purchasers can’t add new restrictions to charity care policies for three years. Ortega said that Prime won’t drop those policies even after the restriction expires.
“We are committing to maintaining charity care beyond the statutory guidelines,” he said, adding that, since Saint Francis will be run by the nonprofit arm, it will still be legally required to provide some charity care.
Dr. Emma Daisy, a geriatric care director at Tapestry 360 Health clinic in Chicago’s Rogers Park neighborhood, said part of the wariness about the deal is that Saint Francis went through several ownership changes in the last decades, losing service in the process.
“All the decisions with all the health care [changes] have been financial,” she said. “You said that your organization is not private equity [owned]. It doesn’t answer the question for me of what’s motivating you.”
Daisy said she was worried about how the change of ownership would affect Saint Francis’ relationship with Federally Qualified Health Centers such as Tapestry, as well as with Thresholds addiction recovery services and Trilogy mental health services provider.
Ortega responded that he couldn’t speak to those specifics, but that generally Prime has plenty of experience working with FQHCs. He also opened the door to potentially restoring some services that were previously eliminated, saying Prime would look into why those cuts happened and whether restoring them would meet some currently unmet needs.
Polly Davenport, Ministry Market Executive for Ascension Illinois, said she “understands and appreciates” that there were “a lot of answered questions” posed throughout the town hall.
“The answers will be coming,” she said. “I realize you all have been through a lot in Evanston, but we will work as hard as we can to answer your questions.”
Biss told the RoundTable after the meeting that it was this lack of answers that worried him.
“What I would love to see is more clarity relative to behavioral health, relative to the Living Room [behavioral health care center], relative to Thresholds, relative to Trinity, relative to charity care,” he said. “The sentiments were terrific, but the promises were relatively … minimal, I would say.”
Saint Francis Hospital buyer faces skeptical audience at town hall is from Evanston RoundTable, Evanston's most trusted source for unbiased, in-depth journalism.