Ascension is selling off its interest in a five-hospital subsidiary system in central Alabama to UAB Health System for about $450 million, the latter announced Tuesday.
The deal for Ascension St. Vincent’s Health System is expected to close in the fall of 2024, pending standard regulatory approvals and a sign-off from the Catholic Church. The deal includes the system’s hospitals, a freestanding emergency department and other clinical facilities and employees that make up the system.
The Board of Trustees of the University of Alabama said it approved the acquisition agreement “after thorough study and due diligence.” At an afternoon press conference, UAB Health System leadership said the organization is planning new infrastructure investments for St. Vincent's and has no plans to upend staffing or clinical operations.
The academic health system and Ascension St. Vincent have shared a “strategic alliance” to strengthen local care access and coordination since early 2020—the teams’ leadership said that the purchase is “the next natural step” of that deal’s care goals.
“We have continued to discuss options to better deliver on our missions in an increasingly complex environment,” St. Vincent’s CEO Jason Alexander, who is also a Senior Vice President at UAB Health System, said in a release announcing the deal. “It became clear that adding Ascension St. Vincent’s to UAB Health System’s network of owned hospitals—and combining and optimizing our collective strengths—is the solution to ensure that our community retains access to sustainable, high-quality healthcare. Among other benefits, patients will gain access to a larger network of local services through UAB.”
UAB Health System is a $6.4 billion system based in Birmingham, Alabama. It has more than 2,600 licensed beds across 17 owned, affiliate and network hospitals and a multi-specialty group of about 1,550 physicians. The system also houses patient care activities of the University of Alabama at Birmingham’s Marnix E. Heersink School of Medicine.
Ascension St. Vincent’s Health System is active in and around the Birmingham area. Its hospitals include St. Vincent’s Birmingham, St. Vincent’s East, St. Vincent’s Blount, St. Vincent’s St. Clair and St. Vincent’s Chilton.
The organizations said that they are working toward a smooth transition with operations continuing as normal. They also said the area’s residents will benefit from the larger care network their deal will create, with UAB Health System CEO Dawn Bulgarella promising the pair's deal will “enhance the overall patient and employee experience in the long-term.”
The UAB Health System Authority will become the sole corporate member of St. Vincent’s Health System in exchange for Ascension’s interests in the system, according to a board resolution approving the deal. Following the deal, the Ascension Foundation for Health Equity will remain active in the Alabama market “expand grant-making beyond the transition period, investing in nonprofit organizations that accelerate positive change for generations of Alabamians,” Alexander said.
During a special meeting of the University of Alabama's board of trustees to approve the agreement, Bulgarella said that Ascension approached the academic system in late 2023 to broach a sale. The system is "hopeful that most, if not all, of Ascension St. Vincent’s roughly 5,000 caregivers and associates will remain in their current roles,” she said.
At a later news conference, Bularella stressed "that Ascension St. Vincent's caregivers and associates' job security is not threatened by today's news."
She went on to say that employee compensation and benefits "are anticipated to be comparable to those currently provided," and that the organization is "embracing the existing clinical leadership and culture of care delivery at St. Vincent's." The hospitals will continue to be run as community hospitals with open medical staffs and plans no changes to admitting privileges, day-to-day operations, clinical support staff model or the existing clinical staff bylaws, she told press.
"And this is important—UAB will make new and increased financial investments into clinical and other important infrastructure," she said during the presser.
Ascension is the country’s fourth-largest nonprofit health system with over $28 billion in total operating revenue in 2023. It currently spans 140 hospitals and suffered a nearly $1.6 billion operating loss in its 2023 fiscal year (excluding one-time impairment losses), and a $237.8 million operating loss during the nine completed months of its 2024 fiscal year.