Ontario, Calif.-based Prime Healthcare realigned services at Illinois hospitals it recently acquired from St. Louis-based Ascension, citing unsustainable financial losses and low patient volumes that are associated with worse outcomes, according to a letter from Prime CEO Prem Reddy, MD.
In the June 2 letter, which was shared with Becker’s, Dr. Reddy responded to concerns raised by Sens. Tammy Duckworth and Richard Durbin about recent service changes.
Here are five key takeaways:
1. In May, the senators highlighted changes made since the eight-hospital acquisition, including service cuts at two facilities: the suspension of inpatient pediatric services at St. Joseph Medical Center in Joliet, and the termination of obstetric and maternal care services at St. Mary’s Hospital in Kankakee. The senators requested answers to several questions by June 10, which Dr. Reddy addressed in his letter.
2. The eight hospitals were losing nearly $200 million annually at the time of the acquisition, including losses of $90 million at St. Joseph and $14 million at St. Mary’s, according to Dr. Reddy. Prime has since committed $250 million to the hospitals, including technology upgrades and service line expansions. The system is also expanding older adult behavioral health across Illinois, with plans for a geriatric psychiatric unit at St. Joseph and St. Mary.
3. Inpatient pediatric care at St. Joseph was suspended May 2. Dr. Reddy said the unit averaged fewer than one patient per day in 2024 and noted a declining number of households with children in Will County. He cited research linking low-volume services to worse patient outcomes, including higher mortality rates. A transfer agreement is now in place with nearby Endeavor Health Edward Hospital in Naperville. Eight staff members and two physicians were affected by the suspension; all nurses were offered positions at other Prime hospitals or within different departments.
4. Obstetric services at St. Mary’s were discontinued following a drop in volume to fewer than one delivery per day and the retirement of a physician who provided nearly all inpatient obstetric care, Dr. Reddy wrote.
5. The senators noted that Prime previously told the Illinois Health Facilities and Services Review Board that no service scope- or care-level changes were expected within 24 months of acquisition. Dr. Reddy acknowledged this was said at the time, but also said Prime had stated that post-acquisition assessments could lead to service modifications of discontinuations.
Following the acquisition’s close, Prime said it obtained new data on service line quality and volumes that prompted the recent changes.
