Following an intense two-year study of his system's future, Andrew W. Allen, former president and CEO of CHS, said the move to Ascension will be good for both organizations.
Faced with deciding whether to even continue in the health care ministry, the Sisters of St. Joseph of Carondelet, sponsors of CHS
, courageously began asking themselves tough questions, Allen
said."Do we want to continue to be in health care?How do we want to be in health care?Do we want to do it together as the Sisters of St. Joseph of Carondelet, or can the communities be served in a better way if, in fact, there was a realignment along the lines of other religious communities who are working in those respective geographic areas?They had to go through that evolution to help guide us in terms of how we wanted to look at the next step and how health care was going to be delivered in these communities on a go-forward basis.
"I think the sisters very quickly said, ‘It's not our ministry, it's the ministry that we've created under the ministry of the church,' and so relating to that becomes both giving up and embracing what the next step will be," Allen
With the addition of the CHS facilities, Ascension will now have more than 100,000 employees and a presence in 20 states, Allen
said, explaining that Ascension is acquiring several CHS facilities located in thriving communities."Of the markets that we're in, all but one are located in areas where the population growth is higher than the national average," he
"Ascension takes as a great responsibility being the largest Catholic health care system in the country," Allen
said."People look to them for leadership and direction.We add to that for them."
At the time they joined Ascension, CHS
operated 14 facilities located in Arizona, Georgia, Idaho, Kansas, Missouri, New York, and Washington.
Part of what CHS
brings to Ascension is an improved financial record.
All of our organizations improved their financial performance from the year before," Allen
One of Ascension's considerations while looking at CHS
was the potential of CHS
having a negative financial impact on them."Is there a dilutive effect with Carondelet coming in?They had greater days cash on hand than we did, but our effect on them only lowers their days cash on hand by about two days.So it was positive from that aspect," Allen
The CHS debt, about $250 million according to Allen
, will be refinanced through this transaction with Ascension, and will create an additional $50 million savings across the CHS facilities over the next five years."And that's a conservative estimate," he
said."It's due to the combination of strength and flexibility that Ascension has with debt management.Ascension manages $3.4 billion of debt.So Carondelet's little $250 million is not a big impact on that, and yet it's a major positive impact on our facilities."Allen
said that apart from the financial boost, he
does not expect the move to Ascension to immediately have an impact on CHS facilities, and added that they will keep their names."From an operational perspective and the way they serve their communities, we hope the Carondelet facilities won't see any big changes," he
There will be a change for CHS sponsors, however.CHS
was served by three provinces of the Sisters of St. Joseph of Carondelet, each with representation on the board.In joining Ascension, the three sponsors of CHS
have to become one, electing one sponsor liaison to Ascension's
joins as the sixth sponsor of Ascension
As a management company, CHS
went out of business when it was absorbed into Ascension
Some of the people at the CHS St. Louis headquarters will make the move to Ascension
, others will not, Allen
said."I am so proud of these people in terms of the job they've done and what they can do, but when two organizations come together, not everyone continues on, and that's a disappointment."Allen, who began at CHS as executive vice president and chief operating officer in 1995, said the two-year process leading up to joining Ascension, began with some key questions and a close call with financial turmoil.
"We really started the process by asking, is this the right structure for this health care ministry?There had been some preliminary discussions at the CHS
board level about the structure of the system, and I think they were reinforced by our local institutions who asked, what is it that we expect out of a system?"Allen
said.They began talking about their advocacy situations and their access to capital."Can we continue just among ourselves?"
"The key defining experience that we all had was a very unfortunate situation in terms of our ministry in California.Our Daniel Freeman Hospital
, [Inglewood, CA,] ran into some significant financial trouble, which, at its absolute worst, could have jeopardized all of the other Carondelet ministries.
That whole issue with Daniel Freeman
really took us to the brink of making some decisions," Allen
said.Daniel Freeman Hospital
was sold in December 2001.CHS
then divested Santa Marta Hospital
, Los Angeles, in August 2002."That was all going on while we were looking at this greater issue of ‘What's the right form for this system?'"
Not wanting to give up their health care ministry, the Sisters of St. Joseph of Carondelet started looking at becoming part of a larger system "because the critical mass issues brought up during the Daniel Freeman situation convinced them they needed to be part of a bigger whole," Allen
The sisters came to the conclusion in the fall of 2001 that they wanted the three provinces to make their move together, and they wanted to find a national Catholic health care system with which to partner, preferably one with a strong financial track record, Allen
In an earlier interview, Sr.
The opportunity to add other sponsors was very appealing to us," Allen
It helped that they were not strangers to one another.The two systems had done some advocacy work together, and CHS
had implemented some of Ascension's
management expertise."Also, if you go back historically, which I think is just amazing, when the Daughters of Charity moved out of their cabin in Carondelet, MO, which was given to them by the bishop, the Sisters of St. Joseph of Carondelet
moved into that cabin.And the Sisters of St. Joseph of Nazareth actually trace their founding to the Sisters of St. Joseph of Carondelet.It's amazing to me when that history comes together," Allen
"It's been a wonderful process of getting to know each other.Our constituencies are very pleased about it because they sense the stability on a go-forward basis.They know there will be some changes in terms of how things are done, particularly in a larger system-we're about one-tenth the size of Ascension-but I think we've also discovered some similarities as we've gone forward.It's exciting."Allen
complimented the CHS facility CEOs "for leading their organizations into saying this is the right thing to do.They have been with us all along."Allen
believes so many people from CHS feel good about the alignment with Ascension
because they are most interested in the overall outcome of the health care ministry."We didn't approach the transition from the sense of what's good for Carondelet, but what's good for health care, what's good for Catholic health care."Carondelet
In 1836, a group of Sisters of St. Joseph of Carondelet
left France to open a school for the deaf in St. Louis.Their ministry expanded over the years to include health care facilities in other parts of the United States.