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Five Alabama hospitals to be sold in $450 million deal


The UAB Health System has reached a deal to take full ownership of Ascension St. Vincent’s Health System in Alabama.

Four years after brokering a strategic alliance, the University of Alabama Health System is planning to purchase Ascension St. Vincent’s five hospitals and other healthcare sites in Alabama.

Image: UAB Health System

The University of Alabama Health System is planning to purchase Ascension St. Vincent’s five hospitals in Alabama. Officials hope to complete the deal in the fall.

UAB Health System CEO Dawn Bulgarella said in a special board meeting this week that the system was moving to buy Ascension’s Alabama facilities in a $450 million deal. The University of Alabama’s board of trustees unanimously approved the planned purchase.

Ascension, a nonprofit Catholic system, operates 140 hospitals nationwide. The system has been selling some of its facilities in recent years as it aims to get on a more solid financial footing.

The UAB Health System says it hopes to complete the deal in the fall of 2024. Regulators and the Catholic Church still must approve the transaction, officials said.

Bulgarella says the system plans to operate the five hospitals as community hospitals. Patients will continue to see their clinicians, and Ascension St. Vincent employees don’t have to worry about their jobs, she said.

“​​It's important to know that Ascension St. Vincent's caregivers and associates’ job security is not threatened by today's news,” Bulgarella said in a news conference Tuesday.

“We look forward to supporting continued operations of community physician practices and providing opportunities for Ascension St Vincent's caregivers and associates to essentially remain in their current positions without having to reapply for their jobs,” she said. “We are hopeful that most, if not all, of the roughly 5,000 caregivers and associates will remain in their roles.”

Compensation and benefits will be “comparable” to those currently provided, Bulgarella said.

Pledging new investments

UAB Health also plans to spend money to upgrade the facilities, she said.

“UAB will make new and increased financial investments into clinical and other important infrastructure,” Bulgarella said in the news conference.

UAB Health System operates a network of 17 hospitals across Alabama.

Ray Watts, M.D., the president of the University of Alabama at Birmingham and the chairman of the UAB Health System board, called the acquisition of Ascension’s Alabama facilities “an exciting opportunity to combine and optimize our collective strengths.”

“At a time when hospitals are closing across the nation, UAB Health System has made it a priority to strengthen Alabama hospitals,” Watts said at the news conference.

Under the deal, the UAB Health System would acquire Ascension hospitals at Birmingham, Blount, Chilton, East and St. Clair. UAB Health will also take ownership of the One Nineteen Campus, which offers specialty care and rehabilitation services, the Trussville Freestanding Emergency Department, and clinics that are part of Ascension Medical Group.

The UAB Health System plans to use “a co-branded model” at the Ascension facilities “to honor and embrace the St Vincent's people and culture,” Bulgarella said.

UAB Health System and Ascension St. Vincent’s formed a partnership in 2020 with the goal of offering better, more convenient care for patients.

Bulgarella says the UAB Health System and Ascension recently began talks in light of “an increasingly complex healthcare environment.”

“It became clear that a deeper affiliation between Ascension St Vincent's and the UAB Health System would ensure that the community has sustainable quality healthcare access long into the future,” Bulgarella said at the news conference.

Selling facilities

For Ascension, the planned sale of the Alabama hospitals follows other moves to shed some facilities as the system continues its work to improve its finances. Ascension announced a deal in the spring to sell three hospitals to MyMichigan Health.

Last year, Ascension agreed to transfer Our Lady of Lourdes Memorial Hospital in Binghamton, N.Y., along with its physician practices, to the Guthrie Clinic of Sayre, Pa.

Ascension reported a $3 billion loss in the 2023 fiscal year, followed by a $900 million loss in 2022, prompting Fitch Ratings to give the system a negative rating outlook in September 2023.

Based in St. Louis, Ascension has reported more encouraging financial news thus far in the 2024 fiscal year. For the 9-month period that ended March 31, Ascension reported $15 million in recurring operations, compared to a $1.1 billion loss in the same period of the previous year.

Ascension has been grappling with a cyberattack that disrupted hospitals and clinics across the system. The attack was reported in early May and prompted some hospitals to divert ambulances and delay non-emergency surgeries.

Last year, Ascension Michigan and Henry Ford Health signed an agreement to enter a joint venture and form a new system with a combined $10.5 billion in revenue.

Several Ascension hospitals in southeast Michigan will be joining with Henry Ford, but the systems say it is not a merger or acquisition. The new, expanded organization would be branded Henry Ford Health, and be based in Detroit.

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