BJC seeks to take ownership of metro-east Memorial hospitals

BJC HealthCare is seeking state approval to purchase both Memorial hospitals in the metro-east.

BJC has requested permission to fully control Memorial Regional Health Services, according to an application filed Nov. 17 with the Illinois Health Facilities and Services Review Board.

MRHS is a partnership created in 2015 for the two companies to cooperate as equal partners in Memorial Hospital in Belleville and Memorial Hospital East in Shiloh. The partnership changed control of Memorial to a board with two parents: Memorial and BJC.

But if the new application is approved, BJC will become the sole corporate owner as of Jan. 1. No exchange of money will be involved in the proposed change of ownership, according to the filing.

At the time of the MRHS partnership, the cooperation between Memorial and BJC was touted as providing greater access to enhanced services and medical expertise, creating “one integrated network” of health care providers. Memorial was in the process of building the new Memorial Hospital East, which opened in Shiloh in 2016.

Memorial spokeswoman Anne Thomure said in a statement that BJC’s takeover of Memorial was always part of the strategic affiliation approved two years ago. “A plan to bring these two organizations together was developed and it was anticipated complete affiliation could take five years or longer,” she said. “However, BJC fulfilled the requirements and obligations established by Memorial Group’s board of directors within the past two years, so we are able to move forward now with total affiliation.”

Assuming the ownership change is approved by the state, Thomure said Memorial will continue to have a representative on the BJC board of directors, as well as some committees. “We are pleased that patients will continue to have access to high-quality care through the network of Memorial and BJC hospitals and physicians,” she said.

BJC operates 15 hospitals in Missouri and Illinois, including the two Memorial hospitals in the metro-east and Alton Memorial Hospital. Memorial opened in Belleville in 1958.

The fair market value of the properties to be transferred is $149.2 million for Memorial Hospital in Belleville and $159.7 million for Memorial Hospital East in Shiloh, according to the filing.

Although both companies hold 50 percent of the membership interest, the filing states that BJC effectively controls MRHS and the net assets and operations were consolidated at the time of the affiliation agreement finalized in 2016.

The filing states that no changes in the hospital’s charity care policy or any material changes to providing of services for at least the two years following the merger. While it references expected cost savings, the amount was not specified.

Memorial’s chief competition in Belleville was St. Elizabeth’s Hospital, which was approved to move to a new facility in O’Fallon in 2015. The city of Belleville spent more than a quarter of a million dollars fighting the relocation.

This story was originally published December 1, 2017 at 6:01 PM with the headline "BJC seeks to take ownership of metro-east Memorial hospitals."