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The proposed sale of Saint Louis University Hospital has been the focus of widespread discussion during the last month. But even with all the talk and media attention, the fundamental effect of the transaction - preservation of the University's educational mission in the health sciences - has received little attention, said Dr. James Kimmey, vice president for health sciences and chief executive officer of the Health Sciences Center.
| "Sustaining Catholic, Jesuit education for physicians, nurses and allied health professionals was the primary goal of the effort to find a partner." |
"The Saint Louis University board of trustees accepted the Tenet proposal because, of the alternatives presented, it provided the strongest assurances that the University's health professions' education activities would survive and thrive into the next century," Kimmey said. "Sustaining Catholic, Jesuit education for physicians, nurses and allied health professionals was the primary goal of the effort to find a partner."
Kimmey said that deterioration in the profitability of the hospital under the pressures of expanding managed care and shrinking federal support would have rapidly eroded the University's ability to subsidize education and research from clinical income. In a relatively short time, the health professions' programs would have had to downsize dramatically and, eventually, might have closed completely without the stable income stream provided by the proceeds of the sale of the hospital.
"The transaction has been characterized in some quarters as motivated by greed or as an abandonment of mission," Kimmey said. "Both characterizations are incorrect. The University accepted a substantially higher offer from Tenet because it means a substantially greater flow of stable income for the health professions' programs in the future. By converting an asset that was clearly losing its ability to subsidize education to endowment that earns stable returns, the trustees have provided assurance that needed subsidies can continue."
Kimmey said that this, in turn, supports the central mission of the University: to educate and to advance knowledge through research.
"In the heat of the moment, some forget that were it not for the needs of the schools at the Health Sciences Center, the Jesuits never would have operated a hospital on South Grand," Kimmey said. "The hospital is a means to the end of sustaining education. Under the agreement reached with Tenet, the hospital will remain as the principal teaching facility for the schools, the faculty will be the medical staff, and the activities that differentiate the hospital's services from those of community hospitals are guaranteed."
Ensuring the educational mission of the University was not bought at the expense of the healing mission of the hospital, one firmly grounded in its Catholic heritage, Kimmey said. As part of the transaction, Tenet has agreed to operate the 303-bed hospital with the traditional Jesuit mission, an active program of pastoral care services and its charity-care policies in perpetuity.
"The trustees were convinced that the commitments made by Tenet will sustain these vital elements of the hospital's character in perpetuity," Kimmey said. "Change is always difficult, and there will be many changes as the University and Tenet embark on this new partnership in provision of health services to those in need. At this point in history, change also is inevitable, and the University's ability to channel change in ways that support its ultimate educational mission was a major factor in the selection of Tenet as a partner. At every level of governance the two parties share equally, a fundamental characteristic of true partnership, and one that bodes well for the future of the relationship."
Once the sale is complete, Saint Louis University Hospital will become part of Tenet's growing integrated health care delivery system in the greater St. Louis area. All current hospital employees will become Tenet employees when the transaction closes.
"This transaction will be good for the hospital, for Saint Louis University and for the greater community we serve," said Michael F. Shanahan Sr., chairman of the Saint Louis University board of trustees. "In today's changing health care environment, it is imperative for Saint Louis University Hospital to have a strong partner and to be part of a strong regional network. Being part of the Tenet network ensures that the hospital will continue to thrive as a nationally recognized medical teaching center, providing the highest quality medical care to the entire St. Louis area."
Based in Santa Barbara, Calif., Tenet owns 131 hospitals in 22 states. In the St. Louis area, Tenet operates Lutheran, Deaconess Central, Deaconess West and Lafayette-Grand hospitals, as well as Columbia Regional Hospital in Columbia, Mo., and Lucy Lee Health System in Poplar Bluff, Mo.
"Tenet is committed to maintaining the high standards of compassionate care that have been the hallmark of this hospital for more than 60 years, while giving the community the added benefit of being part of a strong and growing regional network," said Michael H. Focht Sr., president and chief operating officer of Tenet Healthcare. "Adding a tertiary/quaternary hospital of the quality of Saint Louis University Hospital to our network will create one of the largest, most sophisticated delivery systems in the region."
This transaction includes Saint Louis University Hospital and assets related to its operations. The University Medical Group (UMG) physician practices and SLUCare managed care contracting service will remain integral parts of the University and will remain strongly affiliated with Saint Louis University Hospital.
The transaction is subject to the signing of a definitive agreement and regulatory approval. Financial terms were not disclosed.
University President Lawrence Biondi, SJ, said the decision to sell the hospital was undertaken only after careful consideration and discernment of all options. He stressed that the decision by the board of trustees was based on the clear principle of how best to preserve a primary mission of the University: Catholic health professions education.
"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," Biondi said.
Under terms of the transaction, the hospital will continue to abide by the Ethical and Religious Directives of the U.S. Conference of Catholic Bishops and will continue the hospital's full-time pastoral care program for patients and their families, seven days a week.
Underscoring its commitment to the St. Louis community, Tenet Healthcare Corp. will donate $1.5 million to the University to endow a professorial chair in medical ethics and an additional $100,000 to develop international medical ethics conferences, colloquia and similar programs.
Biondi said Tenet's commitment to maintaining the hospital's current policy of charity care also was a major factor in gaining support for the transaction from the University's board of trustees.
Once Tenet assumes ownership of the hospital, a new governing board will be formed, composed entirely of Saint Louis University faculty physicians and community members who will oversee the hospital's operations. In addition, Tenet and Saint Louis University have agreed to establish a joint coordinating committee of 10 members, with each partner nominating five, to facilitate the hospital's teaching mission, its role in integrated networking and its selection of top administrators.
"Being aligned with a partner provides a larger base of referrals, creates new opportunities for community-based education for our students in the health care professions and allows cost reduction through combined management and support activity, as well as better distributed clinical services," said Walter Davisson, M.D., University trustee and chairman of the committee for the Health Sciences Center. "The partnership with a nationally recognized and financially solid corporation such as Tenet also provides access to capital support for expansion of selected services."
Proceeds from the proposed sale will be used to maintain and strengthen health professions education programs and research activity at the University into the next millennium.
Tenet has committed to sustain employment and seniority for the hospital's approximately 1,650 employees.
Since 1933, Saint Louis University Hospital has been one of two academic tertiary/quaternary hospitals in the St. Louis area. It provides a full-range of adult medical and surgical services.
Tenet is the nation's second-largest investor-owned hospital operating company. The company employs 105,000 people. Tenet's name reflects its core business philosophy: the importance of shared values between partners - including employees, physicians, insurers and communities - in providing a full spectrum of quality health care. Tenet can be found on the World Wide Web at www.tenethealth.com.
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- Biondi Answers Questions About Hospital Sale
- Hospital Transfer Sparks Benefit Questions From Employees
- A Comparative View of Charity Care in St. Louis Catholic Hospitals
- A Message From the President