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University President Lawrence Biondi, SJ, recently discussed with Grand Connections the sale of Saint Louis University Hospital to Tenet Healthcare Corp.
On Oct. 4 the University's board of trustees announced that it had signed a letter of commitment for the sale of Saint Louis University Hospital and related assets to Tenet. The announcement followed approval of the commitment by the University's board of trustees and Tenet's board of directors.
GC: How do you feel about the hospital being managed by a for-profit company? Is it still considered Catholic?
Biondi: I agree with Tenet's corporate policy of not paying dividends to its shareholders, choosing instead to reinvest net profits into their hospitals. This helps ensure that the communities they serve receive the best possible health care. In accordance with the contract between Tenet and Saint Louis University, the hospital will always be managed in accord with Catholic, Jesuit principles. We would not have entered into a partnership with anyone who would not guarantee that. The governing board that will oversee the hospital's operations will be composed entirely of Saint Louis University faculty physicians and community members. Our commitment to indigent care, pastoral care and following the ethical and religious directives of the U.S. Conference of Bishops will not be compromised.
GC: What are your reactions to those who oppose the sale?
Biondi: Tenet is the best possible partner for our hospital because of its national resources, its determination to build the area's best integrated network, and most important, its firm commitment to maintain the Catholic spirit and Jesuit heritage of this hospital. A for-profit corporation, particularly one as committed as Tenet is to our mission and values, can indeed do these things. I don't agree with critics who say it has to be a not-for-profit management structure to maintain such values.
GC: Why didn't the University choose to affiliate with the Catholic network partners?
Biondi: As the records show, as far back as 1994 we had recommended the concept of establishing a Catholic network in St. Louis that would include Saint Louis University, Unity Health System and the SSM system. Archbishop Rigali was asked to coordinate this proposal but was not successful in that effort. Not being directly affiliated with a "Catholic" owned network does not make us any less Catholic. The traditional Jesuit mission is now and always will be the driving force of the University and Health Sciences Center.
GC: Does the University need the Catholic Church and the Archbishop's approval to complete this transaction?
Biondi: The University and its hospital are owned and managed by the board of trustees, the first lay board of any Catholic university in the United States. We are not owned by the Catholic Church, and therefore are not owned by the Jesuit order nor by the Archdiocese of St. Louis. Out of courtesy to Archbishop Rigali, and in the spirit of dialogue between archbishops and Catholic university presidents that is recommended by Pope John Paul II and encouraged in Ex corde Ecclesiae, the Vatican's published views on higher education, I have kept Archbishop Rigali completely informed of the process that led to the trustees' decision to accept Tenet's proposal. I also have advised him of our challenges and our specific interests throughout the discernment process. All of the Jesuit universities have implemented transactions involving the sale of major properties and facilities, and follow this procedure out of respect and courtesy for their local bishops. We have done that as well. The trustees have acted in the best interest of the University, the hospital and our community.
GC: Will there be employee lay-offs?
Biondi: Tenet will hire all current hospital employees at comparable wages and with standard benefits, plus a new tuition remission program for employees, spouses and dependents.
GC: Is Saint Louis University doing this for the money?
Biondi: No. We're doing it for education. We're doing it to preserve and strengthen our commitment to health professions education and to guarantee that our mission continues as a quality patient care center. In today's health care climate, it is imperative for any hospital to be part of a growing regional network. The Tenet network ensures that Saint Louis University Hospital will continue to thrive as a nationally recognized medical teaching center, providing the highest quality medical care to the entire St. Louis area. Tenet is committed to maintaining the high standards of compassionate care that have always characterized this hospital.
GC: What will the purchase money be used for?
Biondi: The money will be placed into an endowment to preserve and strengthen our health profession education programs and research activity It will ensure a strong future for our School of Medicine as well as our Schools of Nursing, Allied Health Professions and Public Health along with the Centers for Health Care Ethics and Advanced Dental Education.
GC: Why won't you disclose the purchase price? How do we know if it's a fair price?
Biondi: Because of the contractual agreement that was agreed upon by the University and all potential partners, I cannot disclose the specifics of the agreement or the price, except to say that it is a very fair price. However, the board of trustees made the determination to accept Tenet's proposal not just based on price, but also on other important issues, including joint governance and the commitment to maintain the true spirit of the hospital's mission.
GC: Hasn't the hospital been profitable for many years? Why sell now?
Biondi: As an independent hospital, our profitable trend could not continue. The cost of health professions education is high. University-owned hospitals have had to adapt and establish networks and have even sold facilities to survive long-term. The teaching hospital of our fellow Jesuit school, Creighton University, is jointly owned by Tenet, and the university is pleased with their relationship.
GC: Would the University have had to close down the hospital if you didn't sell?
Biondi: Down the road, that was a possibility. The ever-changing managed care situation, increased costs of health professions education and a variety of other issues would become a problem for us, just as they have been for many other hospitals.
GC: What effect will this transaction have on charity care?
Biondi: Tenet will continue to operate the hospital with its traditional Jesuit mission - including an active program of pastoral service - and its charity-care policies in perpetuity.
GC: What will Saint Louis University Hospital's relationship be with other Tenet hospitals in St. Louis?
Biondi: Saint Louis University Hospital will become the tertiary/quaternary "hub" of Tenet's growing integrated health care delivery system in the greater St. Louis area. That means a larger base of referrals and creates new opportunities for community-based education for our students in the health care professions.
GC: How do you think alumni and the community have reacted to this sale?
Biondi: We think alumni will see this as a bold and proper new step for the University to ensure our ongoing commitment to our mission and further strengthen our services to the community and our position in the national arena of education and health care. We will continue to serve the community efficiently and to provide quality care, regardless of a patient's ability to pay.
GC: Will the hospital retain the name of Saint Louis University Hospital?
Biondi: Yes.
GC: SLU's endowment is among the top 60 in the nation. And the University is in the process of completing a $200 million capital campaign. Isn't there enough money to move forward and still keep the hospital?
Biondi: Our endowment must be strong and our fund-raising efforts must continue if we are to provide the best education and learning environment for all our students. We have kept tuition costs reasonable while ensuring that a degree from SLU is a tremendous investment in one's future. The quality of our students and the increased interest in our faculty and programs by students and parents are paramount.
GC: Is the University selling SLUCare?
Biondi: No. SLUCare has been a successful endeavor in providing care for our patients with our excellent medical staff of generalists and specialists. Our doctors who make up SLUCare will continue their important work and will be the medical staff at Saint Louis University Hospital.
GC: How will Tenet achieve cost savings at the hospital?
Biondi: One of the benefits of networking is eliminating duplication and increasing efficiency.
GC: How does selling the hospital help the University become the finest Catholic university in the United States?
Biondi: There is no doubt that the partnership and the investment in the hospital and its services by Tenet will help us. The sale will guarantee a strong, vital future for the hospital. The proceeds from the transaction will make vital contributions toward reaching our goal of providing the best educational, research and service opportunities for our students and faculty.
Related Stories:
- Tenet Transaction Will Ensure Future of University's Educational Mission
- Hospital Transfer Sparks Benefit Questions From Employees
- A Comparative View of Charity Care in St. Louis Catholic Hospitals
- A Message From the President