SAN FRANCISCO - Ascension has a letter of intent to sell its 220-bed Ministry St. Joseph's Hospital to the Marshfield Clinic.
And over the next three years, Ascension plans to bring all lab work in-house at its 141-hospital system, chief financial officer Tony Speranzo told the J.P. Morgan Healthcare Conference Tuesday.
The Marshfield Clinic, a large physician multispecialty group, is buying Ministry St. Joseph's in Marshfield, Wis. as it expands its ambulatory care and insurance presence in northern Wisconsin and the upper peninsula of Michigan, said Marshfield CEO Dr. Susan Turney, who also presented here.
Turney called it a “reverse migration” by her system into inpatient care. Terms of the purchase were not disclosed.
Speranzo said he expected the deal to be completed in the first quarter.
Marshfield has about 1,200 physicians and revenue of nearly $2 billion.
Ministry St. Joseph's will contribute revenue of about $350 million. Marshfield's outpatient clinics are the main feeder to the hospital.
Marshfield Clinic planned to build a hospital in Marshfield if it couldn't work out a deal with Ascension, Speranzo said.
It currently is building a 44-bed hospital in Eau Claire, Wis. It acquired its first hospital in 2008 in Wisconsin.
Ministry St. Joseph's was founded by the Sisters of the Sorrowful Mother more than 100 years ago.
By in-sourcing all of its system-wide lab work, St. Louis-based Ascension expects to reduce its annual lab cost by about $35 million. The total annual tab for lab work is about $600 million for lab work performed by contract vendors, Speranzo said.
The new consolidated lab initially will be housed in Tulsa, Okla., where Ascension operates a small regional lab, he said. But over three years Ascension will shift the work to its central lab, which may or may not remain in Tulsa. In the process, it will reduce full-time employees working in its various labs by about 70, he said. Eventually, Catholic-sponsored Ascension sees the business getting large enough to offer contract lab services to other providers, said CEO Anthony Tersigni. “We'll be more efficient,” Tersigni said.
Ascension is the nation's largest not-for-profit hospital company with fiscal 2016 revenue of $21.9 billion.