Catholic Health Initiatives, a 64-hospital Roman Catholic system based in Denver, said earlier this month that it would sell its Albuquerque operations, collectively called St. Joseph Healthcare. CHI officials said they hope to have a letter of intent signed by the end of March and a deal completed sometime next year.
The St. Joseph system includes two full-service, acute-care facilities, a rehabilitation hospital and an outpatient hospital, which in total have about 390 beds. It also includes a 6,332-enrollee Medicare provider-sponsored organization, 62 employed physicians and partial interests in several other businesses.
Modern Healthcare was the first to report that CHI had hired investment bank UBS PaineWebber to help it find buyers (Sept. 24, p. 22).
The system board of stewardship trustees made the final decision to sell the Albuquerque operations at a special Oct. 25 meeting. The trustees have requested proposals, but they have not yet narrowed the search to one buyer, and both not-for-profit and for-profit providers have expressed interest, said Joyce Ross, CHI's senior vice president of communications.
The Albuquerque system needs a capital investment of $35 million to $50 million in the next several years, a financial commitment CHI was not willing to make, Ross said. The system's flagship hospital, 179-bed St. Joseph Medical Center, is 33 years old.
"For the CHI board, the decision was that we cannot justify continuing to invest the amount of capital that St. Joseph requires when we as an organization must look at the needs of all of our facilities in all of our markets," Ross said.
The local system's top executive is Arthur Dunn, interim president and chief executive officer, who is also a senior vice president at the Hunter Group, a St. Petersburg, Fla.-based turnaround firm. For the fiscal year ended June 30, CHI reported net income of $167 million on operating revenue of $5.7 billion. Ross said the system has budgeted $400 million in capital expenditures for all of its hospitals in the current fiscal year.