Some $1 million of a $25 million St. Louis hospital deal is headed to Vatican City.
The Catholic archdiocese of St. Louis transferred control of Cardinal Glennon Children's Hospital to SSM Health Care System in exchange for $25 million on April 30.
SSM, sponsored by Franciscan Sisters of Mary, has operated the hospital since it opened in 1956. Now it will take over governance and appointment of board members. It also will integrate Cardinal Glennon into a pediatric-care network it's developing in Illinois and Missouri.
The sale rescues the archdiocese from a financial predicament. Last October it discovered it was $25 million in debt to its own internal revolving fund, said Monsignor Dennis Delaney. In addition it was projected to run a $5.5 million deficit in the fiscal year ending June 30.
The archdiocese put together a $40 million financial plan, of which $35 million was raised from gifts and gains in a stock portfolio.
On the transaction date, SSM paid the archdiocese $16 million. Of that, $5 million will cover the last installment in the $40 million rescue plan. Another $3 million will be used to help phase in a new, increased assessment the archdiocese will levy on parish churches.
The archbishop's charity fund will receive $3 million "for immediate response to local, national and international requests for assistance and relief." A further $4 million will be used to implement recommendations of a strategic pastoral planning study. Finally, $1 million will be donated to the Holy See in Rome "for the use by the Holy Father in his service as pastor of the universal church."
For the next three years, SSM will match three-for-one any funds raised by the archdiocese for certain activities, to a maximum of $3 million per year. Of that, $6 million will go toward a youth-oriented capital campaign. The remaining $3 million will fund an endowment for children's programs, especially spiritual ones.
Two factors led to the determination of the sale price, Delaney said. First, a professional appraisal was done. Second was "a joint recognition by all parties" of the archdiocese's role in creating the hospital and supporting it over the years through fund raising.
As the archdiocese "had no competence or expertise in operating the hospital" at the start, Delaney said, it handed over operational responsibility to the Sisters under a 99-year lease.
"This move will not affect the day-to-day operations of Cardinal Glennon," said Sister Mary Jean Ryan, SSM president and chief executive officer. "The hospital's mission remains unchanged."
Dixie Platt, spokeswoman for SSM, said funds for the transaction came from SSM's cash reserve. Moving the hospital under SSM control should result in "increased access to healthcare, and more healthcare services available at more sites," she said, especially in areas of great need.
The system could have developed its children's care network without buying Cardinal Glennon, she said, "but this gives us more flexibility."