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Providence Medical CenterAn agreement was announced today for Prime Healthcare Services to purchase Providence Medical Center in Kansas City, Kan. (Staff photo)
Providence Medical Center
SCL Health System today announced with Prime Healthcare Services that they have reached an agreement for Prime Healthcare Services to purchase both Providence Medical Center in Kansas City, Kan., and Saint John Hospital in Leavenworth, Kan.
The terms of the agreement were not disclosed, according to a spokesman.
Providence will be changing from a nonprofit owner to a for-profit owner if the sale terms are made final. The sale process could be completed in the spring.
Prime Healthcare Services, a for-profit entity, is based in California, and has 21 hospitals in several states.
“We entered into the asset purchase agreement in order to insure the hospitals would remain open as acute care facilities,” said Cheston Turbyfill, director of public affairs for the SCL Health System.
“Over the past 10 years we had invested significantly in the health facilities there, and it just became unsustainable to continue under that model. The reality is today’s overall health care environment is challenging.”
Combined with capital investments and facility upgrades, the amount of charity care and debt, retaining the hospitals became unsustainable for SCL Health System. The agreement with Prime Healthcare Services allows them to remain as full-service hospitals.
According to a news release from SCL Health System and Prime Healthcare, Prime will make investments to financially stabilize the facilities and ensure that both hospitals continue to provide compassionate and quality care to Wyandotte and Leavenworth counties and surrounding communities.
Prime will maintain current acute care and emergency department services at both campuses for at least five years; offer employment to substantially all employees; continue the hospitals’ commitment to the community by maintaining current levels of charity care; and provide at least $10 million toward capital and other investment projects over the next five years, according to the news release.
“We are confident we have found the best organization to ensure a successful future for both Providence Medical Center and Saint John Hospital,” said Michael Slubowski, president and CEO of SCL Health System, in the news release. “The clinicians and associates at these facilities are dedicated professionals who are committed to providing the highest level of person-centered care. With this transaction, they are best positioned to ensure continuation of that care, including to those who are poor and vulnerable.”
“Prime Healthcare intends to reaffirm these hospitals as top providers of quality health care in the state and country,” said Dr. Prem Reddy, chairman, president and CEO of Prime Healthcare Services. “We understand how important these acute care facilities are to the people in Wyandotte and Leavenworth counties and intend to ensure they remain in vital service to these communities for years to come.”
During the past 10 years, SCL Health System has invested significant resources to sustain the mission of these care sites, including capital investments of more than $96 million, according to the news release. In addition to facility and technology upgrades, SCL Health System has contributed $212 million for charity care and an additional $215 million in bad debt expenses during that same period.
Given the challenging economics of today’s health care environment, the ongoing operating model was deemed unsustainable by both SCL Health System’s Board of Directors and Leaven Ministries, the sponsoring organization of both care sites.
“We are appreciative of the wonderful legacy the Sisters of Charity of Leavenworth leave these hospitals and our communities,” said Dr. Michael Parra, board member for Providence Medical Center and Saint John Hospital. “Yet, now is the time to embrace a new direction and Prime Healthcare Services has a strong reputation for quality, excellence and growth.”
Saint John Hospital and Providence Medical Center, as well as medical office buildings and certain joint ventures, will transition to Prime Healthcare Services. The Duchesne Clinic and Saint Vincent Clinic as well as the Providence Saint John Foundation, will remain with SCL Health System and continue to serve the community. SCL Health System and Prime Healthcare are negotiating a contract for the continuation of certain services such as information systems. Both Providence Medical Center and Saint John Hospital will continue to provide comprehensive medical care during the transition. There will be no effect on patient care, a spokesman said.
The SCL Health System is now based in Denver, Colo. The nonprofit, faith-based entity operates 11 hospitals, four safety net clinics, one children's mental health treatment center and more than 100 ambulatory service centers in four states including California, Colorado, Kansas and Montana.
SCL Health System was founded by the Sisters of Charity of Leavenworth. The sisters opened their first hospital in 1864.
Providence Hospital opened in 1920 at 18th and Tauromee in Kansas City, Kan. The hospital was established by the Sisters of Charity of Leavenworth after they received a request from Bishop John Ward for a new hospital.
Providence Medical Center had merged with St. Margaret's Hospital in the 1970s in Kansas City, Kan. In 1976, Providence-St. Margaret Health Center moved to 89th and Parallel Parkway, Kansas City, Kan. The hospital was then operated by the Catholic archdiocese. It returned to the Sisters of Charity of Leavenworth Health System in 1991. St. Margaret Hospital was recognized by historians as the first hospital in Kansas City, Kan. It was opened in 1887 by the Sisters of St. Francis at 7th and Vermont.