SSM to ac­quire St. Louis U. hos­pi­tal from Tenet

Modern Healthcare - - REGIONAL NEWS - —Me­lanie Evans

SSM Health, a grow­ing four-state health sys­tem, will ex­pand its op­er­a­tions in St. Louis in a pro­posed deal with St. Louis Uni­ver­sity.

SSM, based in St. Louis, would ac­quire 356-bed St. Louis Uni­ver­sity Hos­pi­tal un­der the deal, and St. Louis Uni­ver­sity would be­come a mi­nor­ity owner in SSM’s St. Louis op­er­a­tions.

But first, Tenet Health­care Corp. must sell the hos­pi­tal back to the uni­ver­sity. The Dal­las-based hos­pi­tal chain an­nounced plans to do so last week. Terms of the planned trans­ac­tions were not dis­closed.

Tenet ac­quired the teach­ing hos­pi­tal in 1998. Its sale would leave the in­vestor-owned com­pany with one hos­pi­tal in the St. Louis mar­ket. SSM will op­er­ate nine St. Louis-area hos­pi­tals af­ter the deal closes.

SSM Health is No. 2 in mar­ket share in the St. Louis area be­hind BJC Health­Care. BJC had 34% of hos­pi­tal dis­charges in the area in 2014 and SSM had 21%, ac­cord­ing to doc­u­ments BJC filed this year for po­ten­tial bond­hold­ers.

The ac­qui­si­tion by SSM “gives them strate­gic ad­van­tages that Tenet could not ex­tract from this one par­tic­u­lar as­set,” said Walt Mayo, an an­a­lyst for R.W. Baird. “Tenet is re­fo­cus­ing its strat­egy, and part of that means get­ting out of sub-scale mar­kets.” Tenet’s re­main­ing St. Louis­area fa­cil­ity, Des Peres Hos­pi­tal, is in a sub­urb with fa­vor­able in­sur­ance cov­er­age, Mayo said.

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