BJC HealthCare, a nonprofit health system based in St. Louis, is making plans to take over partial governance and share some costs and services with the operators of Memorial Hospital in Belleville, hospital officials announced Thursday. They deemed the deal a “strategic affiliation.”
Memorial Hospital is an independently owned, 316-bed facility in Belleville, Ill. Its operator, Memorial Group, Inc., reported a loss of $28 million in 2013. It recently won approval from an Illinois state regulator to build a new facility and transfer a portion of its beds to nearby Shiloh.
The CEOs of BJC HealthCare and Memorial Group, Inc. signed a letter of intent this week outlining the deal, but they declined to share the document. They said they expect to finalize details in about three months and submit them for regulatory approval.
“When we think about coming together, we believe costs will come down,” said BJC CEO Steve Lipstein. “We can buy supplies together; we can purchase information technology, medicines. If we buy them together we can lower our costs and devote more resources to the delivery of patient care.”
Lipstein said some aspects of the deal are still up in the air, such as whether there would be any changes to staffing.
“The existing medical staff is very strong and very comprehensive. To the extent there are opportunities for Washington University physicians to be a part of this affiliation, (through BJC), that’s something we have not yet explored,” Lipstein said.
Anticipating increased demand in Belleville
Recently, St. Elizabeth’s Hospital in downtown Belleville was given the green light by a state regulator to close its existing facility and build a new hospital in O’Fallon, Ill.
“We are concerned about capacity in Belleville,” said Memorial’s CEO, Mark Turner. “We are concerned about the influx of patients and being able to handle those patients, not only in our emergency department but also in our intensive care unit.”
As to whether the deal with BJC would make it easier to meet the needs of an influx in patients, Turner said “I think it could.”
In 2013, BJC Health System reported profits of $107.6 million, according to their latest available IRS filing. The network operates 12 hospitals, four behavioral health centers and numerous outpatient clinics in the St. Louis region.
Most recently, BJC acquired a competitor in Farmington, MO: the 135-bed Mineral Area Regional Medical Center, operated by Capella Healthcare. BJC already operates Parkland Health Center, the only other hospital in town. Though Mineral Area and Parkland hold separate hospital licenses, BJC officials said they will operate as two locations of the same hospital.
