Tenet Healthcare Corp. late last week threw in the towel on one of the five hospitals in its St. Louis network, becoming the first multihospital system in that overbedded market to close one of its acute-care facilities.
Compton Heights Hospital, long known as Incarnate Word Hospital, will cease admitting patients May 1. All patients will be discharged or transferred by May 31. The 336-bed facility was running an average daily census of 68, Tenet said.
Tenet officials said the hospital was no longer needed. Many of the hospital's 562 employees will be eligible to find jobs at Tenet's other facilities.
Compton Heights is the third hospital in the St. Louis area to close since the beginning of the year. Normandy Community Hospital, an 80-bed facility in north St. Louis County, closed in February, and 118-bed Bethesda General Hospital closed earlier this month.
"The St. Louis market has always been overbedded," said James Stutz, executive director of the St. Louis Area Business Health Coalition. The closure of Compton Heights Hospital "is a result of forces that have been building for a number of years--too much capacity and financial pressures from payers. It's too early to tell whether this closure will have an effect on the market."
When system mergers became the rage a few years ago, systems were touted as better able to rationalize their resources, he added. This closure supports that argument, he said.
Tenet said in a written statement that the hospital's patient base would be adequately served by numerous other nearby hospitals, including its 303-bed St. Louis University Hospital.
Compton Heights was founded in 1933 and owned for decades by the Sisters of Charity of the Incarnate Word, then based in San Antonio, Texas. Sisters of Charity is now part of Christus Health.
The Sisters of Charity merged Incarnate Word with the two-hospital Deaconess Health System in September 1995, creating a locally controlled three-hospital system with about 8% of the market.
In January 1997, Tenet agreed to buy the Deaconess Incarnate Word Health System for $133.5 million and convert it to for-profit status. Tenet already owned 408-bed Lutheran Medical Center and later added St. Louis University Hospital. The sale was completed July 1, 1997.
Missouri Department of Health statistics show that Compton Heights has been losing money or just breaking even for several years. In 1998 it lost $4 million.
Elissa Granick, a Standard & Poor's analyst who follows the St. Louis market, said: "These for-profit chain hospitals, particularly post Balanced Budget Act (of 1997), will not just keep hospitals open. They will be very intolerant of poor performers."