On March 1, Ontario, Calif.-based Prime Healthcare completed its acquisition of eight St. Louis-based Ascension hospitals in Illinois.
The hospitals included in the acquisition were Ascension Holy Family in Des Plaines, Ascension Mercy in Aurora, Ascension Resurrection in Chicago, Ascension St. Francis in Evanston, Ascension St. Joseph–Elgin, Ascension St. Joseph–Joliet, Ascension St. Mary–Chicago and Ascension St. Mary–Kankakee. Four post-acute and senior living facilities and two ASCs were also part of the purchase.
A ninth hospital, Ascension St. Elizabeth in Chicago, was included in the acquisition, but closed mid-February. Prime plans to work with the city of Chicago and community members to determine next steps for the facility.
Under the acquisition, six of the eight hospitals will become for-profit, while Ascension St. Francis and Ascension St. Mary–Kankakee will remain nonprofit.
Becker’s connected with Mark Reece, corporate regional director of business development, marketing and communications for Prime, to dive deeper into the hospital acquisitions and the plans for the future of the facilities.
Editor’s note: Responses have been lightly edited for clarity and length.
Q: How does Prime plan to ensure a smooth integration for the acquired hospitals while maintaining staff retention and quality care?
Mark Reece: For over two decades, Prime Healthcare has specialized in acquiring and transforming hospitals into centers of excellence, ensuring continuity of care and long-term sustainability. With each acquisition, we implement a comprehensive transition plan that prioritizes investment, quality improvement and staff engagement. The recent Illinois acquisition, encompassing eight hospitals and hundreds of affiliated physicians, is a historic milestone.
Over the past several months, we have worked closely with national and local leadership, staff, and community stakeholders to ensure a seamless transition. Key integration achievements so far include:
- Stability: Successfully hired nearly all associates, which including affiliated medical staff totals to over 13,000.
- Growth: Created over 1,000 new jobs through insourced services.
- Enhanced services: Brought key operations in-house, including laboratory and environmental services.
- Physician engagement: Hired hundreds of physicians under a newly established non-profit foundation model.
- Hospitalist transition: Shifted hospitalist employment from a private equity firm to the non-profit Prime Healthcare Foundation, ensuring stability and alignment with patient-centered care.
- Investment in technology and innovation: Rapidly implemented Epic EMR at Resurrection Hospital an achievement that typically takes months — and initiated full Epic deployment across all hospitals within 18 months.
- New quality and patient experience platforms: Launched cutting-edge technology to enhance pharmacy management, clinical best practices and patient experience.
- Professional development: Expanded PrimE-Academy, an award-winning virtual education platform, supporting staff growth and career advancement.
- Holistic wellness and spiritual care: Strengthened spiritual care programs and reinforced hospital affiliations with the Catholic Church to provide holistic wellness support.
- Leadership and staff engagement: Hosted town halls led by Prime Healthcare’s president and chief medical officer, Sunny Bhatia, MD, to directly connect with associates and provide ongoing support.
Q: What challenges might arise in transitioning six of the eight hospitals to for-profit status? How do you plan to address these?
MR: As a physician-founded and physician-led system, Prime Healthcare remains committed to high-quality clinical care, operational efficiency and an exceptional patient experience — across all hospitals regardless of tax-filing status. Prime Healthcare has a proven track record of acquiring and revitalizing hospitals from leading nonprofit systems such as Dignity Health, Catholic Health Initiatives, and Trinity Health. The transition of any hospital has both common and unique challenges. Common challenges include the need for investment in improvements and technology and the need for operational efficiency. Unique challenges center around market dynamics and the needs of each community.
A notable example of the transition of a hospital amidst enormous challenges is our latest acquisition. St. Francis Medical Center in Los Angeles faced bankruptcy and possible closure in 2020. Despite the challenges of the pandemic, Prime successfully acquired and immediately invested over $12 million in technology, infrastructure, and critical resources to enhance care for the community.
St. Francis Medical Center has since won numerous quality awards and recognitions. Drawing from these successes, Prime Healthcare has already implemented strategies to ensure these hospitals remain vital, trusted community assets, with a strong focus on maintaining and enhancing charity care policies.
Q: What factors determine which hospitals are categorized into Prime’s not-for-profit foundation vs. for-profit?
MR: The classification of a hospital within the nonprofit Prime Healthcare Foundation or tax-paying Prime Healthcare Services is based on multiple factors unique to each acquisition. Some nonprofit systems prefer to transition only to other nonprofit entities, while in other cases, having both nonprofit and for-profit hospitals in a market creates strategic advantages. Regardless of designation, both entities share the same mission: delivering high-quality, compassionate care to those who need it most.
The nonprofit foundation model is particularly beneficial for hospitals serving vulnerable, complex patient populations. It provides access to critical federal programs that support specialized service lines, enhance patient safety, reduce readmissions, and ultimately saves lives. Additionally, the foundation enables the establishment of nonprofit medical groups, allowing physicians to qualify for public service loan forgiveness — an essential tool for attracting and retaining physicians in underserved areas.
A strong commitment to medical education is also central to the foundation’s mission. The Prime Healthcare Foundation established the California University of Science and Medicine to train future physicians dedicated to serving underserved communities. It has also expanded graduate medical education programs, bringing valuable educational resources to healthcare markets in need. Whether under Prime Healthcare Services or Prime Healthcare Foundation, our commitment remains the same: to ensure communities have access to high-quality, affordable healthcare when they need it most.
Q: What is Prime’s hope for the future of the shuttered Ascension St. Elizabeth hospital?
MR: Guided by our mission to deliver high-quality, compassionate care and uplift communities, Prime Healthcare will ensure community needs are not only met but exceeded. After many years of deliberation and prayerful consideration, Ascension determined that the continuation of St. Elizabeth as an acute care hospital was not benefiting the community.
Chicago-based St. Mary of Nazareth Hospital is located only one-and-a-half blocks away and is home to a brand-new, multi-million dollar child-and-adolescent behavioral health unit, designed and created for this purpose, so that this new unit will even better serve the needs of patients and ensure continuity of care. Prime Healthcare remains committed to working collaboratively with the public, the city of Chicago and all stakeholders to identify and explore future uses for the St. Elizabeth campus that prioritize the needs of the community and promote the public good.
Q: What does this acquisition mean for Prime’s future expansion? What advice do you have for other system leaders looking into similar acquisitions?
MR: Prime Healthcare has a long-standing mission of acquiring and revitalizing financially distressed hospitals, ensuring they continue serving their communities. Our most recent success — transitioning St. Francis Medical Center during the height of the pandemic — demonstrates our ability to navigate complex challenges while earning state and national recognition for clinical quality and expanded access to care.
The acquisition of eight hospitals and multiple physician practices in Illinois is the largest in Prime Healthcare’s history, reinforcing the strength of our turnaround model. While our focus remains on the seamless integration of these hospitals, we continue to assess strategic opportunities where our physician-led, patient-centered approach can make a meaningful impact.
For system leaders exploring acquisitions, alignment between the operating model and the needs of the target hospital is key to long-term success. Given the current healthcare landscape — marked by payor challenges, rising labor costs, and provider shortages — strategic consolidation is inevitable. Our approach has always been to invest in hospitals that will benefit from our model, ensuring long-term sustainability and improved patient outcomes.
