The two major for-profit Shelby County hospitals are changing owners. The nonprofit Methodist Le Bonheur Healthcare announced on Dec. 13 that it has agree to buy Saint Francis Hospitals in Bartlett and Memphis from publicly traded Tenet Healthcare Corp., based in Dallas, Texas.
According to a Securities & Exchange Commission filing, Tenet agreed to sell the Memphis-area assets for $350 million in cash.
“We have the highest respect for Methodist Le Bonheur, and we are pleased that our facilities will become part of this regional system,” said Sally Deitch, CEO of Saint Francis Healthcare. “Like Saint Francis and Tenet, Methodist Le Bonheur promotes a culture of compassion backed by strong core values and a clear commitment to patient-centered care. We believe this combination will provide the communities we serve with an even greater impact on care delivered.”
The buy will include the physicians’ practices associated with both hospitals and six MedPost urgent care centers. The Methodist press release stated that this acquisition will give their system the ability to serve more members of the community.
“Consistent with our mission, the addition of Saint Francis hospitals will increase access to high quality healthcare, expand services and enhance the delivery of care to improve the overall health of the communities we serve,” said Michael Ugwueke, president and CEO of
Methodist Le Bonheur Healthcare.
Methodist’s leaders expects to see huge benefits to patients and the communities served by:
• Expanding clinical expertise across Methodist’s system of primary, acute, and specialty care
• Increasing focus on high-quality, efficient care for patients with chronic and complex conditions
• Accelerating plans to establish the Methodist Cancer Institute to provide comprehensive care and treatment of cancer
• Increasing Methodist’s investment in medical technologies and innovative approaches to healthcare
• Developing policies that improve health outcomes for community members
• Enhancing the ability to provide additional charity care, philanthropic support and healthcare educational programs to address communities’ specific needs
Methodist declined to elaborate on how the acquisition would accelerate progress toward the Methodist Cancer Institute. A February 2019 press release, however, gave general background information: The vision is to build a National Cancer Institute-designated comprehensive cancer center — one of only 49 in the country — in partnership with The University of Tennessee Health Science Center (UTHSC).
About the Saint Francis acquisition, Ugwueke said, “We look forward to creating a more dynamic team of physicians, nurses and staff dedicated to delivering compassionate high-quality care to anyone who walks through our doors, regardless of their ability to pay.”
Bartlett Mayor A. Keith McDonald is hopeful about Methodist’s investment in Bartlett-area healthcare.
He said, “We’ve had such a great relationship with Saint Francis and I certainly hope we can continue with the owner of our local hospital now.”
He also said Bartlett’s leaders look forward to working together with Methodist Le Bonheur to make sure the community continues to have good health care.
Bartlett Area Chamber of Commerce President John Threadgill said, “We live in an economy that is constantly changing and this announcement just confirms that fact. Obviously, with the City and Chamber having a close working relationship with Saint Francis Hospital-Bartlett, we are concerned about how this will impact our community as we move forward. We know the leadership at Methodist and they have always expressed an interest in being engaged with the Chamber.
“Methodist has a strong reputation for quality health service and I’m certain they will continue that practice in Bartlett,” Threadgill continued. “However, there are a number of hurdles that Methodist and Tenant Healthcare must face before this deal becomes reality.”
The transaction is expected to be completed in 2020, subject to regulatory approvals and customary closing conditions. J.P. Morgan served as financial advisor to Methodist Le Bonheur Healthcare in connection with the transaction.
According to the SEC filing, in connection with the Saint Francis acquisition, Tenet expects to record an estimated non-cash impairment charge of approximately $30 million pre-tax (approximately $29 million after-tax) within continuing operations in the quarter ending Dec. 31, 2019, related to an allocation of balance sheet goodwill that will be written off as part of the transaction.
The online news source Riverton Roll has a recent snapshot view of Tenet’s financial health. The site’s estimates for Tenet’s current fiscal quarter, compared to the same quarter in 2018, indicate it is likely to have a positive year-over-year growth rate of 3 percent.
Methodist Le Bonheur Healthcare
Based in Memphis, Methodist Le Bonheur Healthcare (MLH) has been caring for patients and families regardless of ability to pay for more than 100 years. Guided by roots in the United Methodist Church and founded in 1918 to help meet the growing need for quality healthcare in the greater Memphis area, MLH has grown from one hospital into a comprehensive healthcare system with 13,000 Associates supporting six hospitals, ambulatory surgery centers, outpatient facilities, hospice residence and physician practices serving communities across the Mid-South.
Spokesmen for Saint Francis Healthcare declined to answer questions on why the hospitals were up for sale. Information is also not yet available on how operations and staffing at the Bartlett and Memphis Saint Francis facilities could be affected by the acquisition.
The six affected MedPost Urgent Care Centers currently have 76 total employees and five physicians.
• Bartlett: 3025 Kirby Whitten Road, Suite 4
• Cordova: 1520 Bonnie Lane
• East Memphis: 4562 Poplar Ave., Suite 109
• Germantown: 1941 S. Germantown Road, Suite 103
• Collierville: 853 West Poplar Ave.
• Olive Branch, Miss.: 5142 Goodman Road, No. 107
The Saint Francis Medical Partners (physicians’ practices) including in the purchase have 82 providers (including physicians) and 251 non-physician employees (clinical staff). See the complete list of Saint Francis Medical Partners online at sfmp.com/providers.