The Missouri-based health systems hope to complete the deal by the end of the year.
BJC HealthCare of St. Louis and Saint Luke's Health System of Kansas City say they're exploring a merger that would create the largest health system in Missouri, serving "two distinct geographic markets."
The boards of directors at the systems this week unanimously approved a non-binding letter of intent to form an integrated, academic health system that they claim will expand "healthcare access to high-quality patient care for more than six million residents in Missouri and beyond."
The systems hope to finalize the merger by the end of 2023, assuming regulatory approval.
The systems are based in Missouri's two biggest cities, with headquarters located about 250 miles apart. The 28 hospitals and scores of clinical venues created by the consolidated system, if approved by state and federal regulators, would serve "two distinct geographic markets," the systems say.
It is not clear how a consolidated healthcare system would affect consumer costs, but numerous studies have shown that healthcare consolidation -- including hospitals, physician practices, drug makers, and payers – usually lead to higher prices for consumers.
With that in mind, the Federal Trade Commission has stepped up oversight of healthcare consolidations and has aggressively – and often successfully – sought to quash them. State regulators have also turned a critical eye toward the strategy.
If the merger is consummated, the systems will continue to serve their "two distinct markets," maintain their existing brands, and operate from dual headquarters in St. Louis and Kansas City
The merged system's C-suite and board of directors will include representation from both BJC and Saint Luke's. BJC President and CEO Richard Liekweg will be CEO of the consolidated system, with the inaugural board chair coming from Saint Luke's.
Liekweg says the hoped-for merger addresses challenges created by "the rapidly changing healthcare landscape."
"With an even stronger financial foundation, we will further invest in our teams, advance the use of technologies and data to support our providers and caregivers, and improve the health of our communities. These are opportunities that we can better achieve together," Liekweg says.
Saint Luke's President and CEO Melinda Estes, MD, says the two systems enjoy "well-established reputations for delivering exceptional care and elevating the health of the people we serve."
"Through our decade-long relationship as a member of the BJC Collaborative, we've established mutual trust and respect, so the opportunity to come together as a single integrated system that can accelerate innovation to better serve patients is a logical next step," she says.
BJC is one of the nation's largest nonprofit health systems with 14 hospitals, including Barnes-Jewish and St. Louis Children's Hospital, an affiliation with Washington University School of Medicine, and dozens of care venues serving greater St. Louis, southern Illinois and southeast Missouri.
The 140-year-old, faith-based Saint Luke's Health System includes 14 hospitals and campuses and more than 100 primary care and specialty offices, treating patients in 67 counties in Missouri and Kansas.
“We've established mutual trust and respect, so the opportunity to come together as a single integrated system that can accelerate innovation to better serve patients is a logical next step.”
Melinda Estes, MD, president / CEO Saint Luke's Health System
John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.
KEY TAKEAWAYS
If the merger is consummated, the systems will continue to serve 'two distinct markets,' maintain their existing brands, and operate from dual headquarters in St. Louis and Kansas City.
It is not clear how or if the consolidated system would affect consumer costs, but numerous studies have shown that healthcare consolidations often, if not always, lead to higher prices.
The FTC has stepped up oversight of healthcare consolidations and has aggressively – and often successfully – sought to quash them. State regulators have also turned a critical eye toward the strategy.