Avera to acquire two CHI hospitals in S.D.

The Avera Health system will acquire two South Dakota hospitals and four long-term-care centers from Catholic Health Initiatives in a deal announced this week.

The deal includes 164-bed St. Mary's Healthcare Center, Pierre, and 60-bed Gettysburg (S.D.) Memorial Hospital. The agreement also includes long-term-care centers Maryhouse and ParkWood in Pierre, plus Oahe Manor and Oahe Villa Congregate Living Center in Gettysburg. Financial terms of the deal between the two Catholic not-for-profit organizations were not disclosed.

“Avera is excited to expand our services in central South Dakota,” Avera President and CEO John Porter said in the release (PDF). “Our mission calls us to provide the highest quality of care possible at local facilities. Adding the services and employees in Pierre and Gettysburg allows Avera to provide a full continuum of care to patients across the region.”

CHI President and CEO Kevin Lofton said in the release, “Stronger ties between the physicians of Avera Medical Group Pierre and the local hospitals will mean better coordinated care for patients. The rapidly changing healthcare environment calls for a more integrated approach to the way healthcare services are delivered to communities. This transfer is in the best interests of the people and communities we serve.”

Sioux Falls, S.D.-based Avera and Englewood, Colo.-based CHI have been in talks since last spring. The agreement would go into effect Jan. 1. Avera runs 28 hospitals, including contract managing 12 hospitals. The deal still requires regulatory and church approvals, according to the release. CHI currently has 56 hospitals. Earlier this month, CHI sold St. Joseph Medical Center, Towson, Md.

Total operating revenue for the South Dakota facilities for the fiscal year that ended June 30 was $51.7 million, according to a CHI financial report (PDF) filed earlier this month.

“CHI reported the deficiency of revenue over expenses (net loss) in discontinued operations in the statement of changes in net assets in the 2012 financial statement,” the report stated, offering no further details.