USA Health acquires Providence Hospital in Mobile

The University of South Alabama Health Department is buying St. Louis-based Ascension’s Providence Hospital and its clinics in an $85 million transaction expected to close this fall.

The transaction was approved by the US Board of Trustees during its Tuesday meeting in Mobile.

“This is a very exciting day for healthcare in the Mobile region,” said USA Health CEO Owen Bailey. “We’re excited to see what Providence Hospital brings to the table. Our goal is a smooth transition of services with little disruption.”

The acquisition will allow the health authority to purchase the 11-story, 349-bed Providence Hospital at Airport Boulevard and associated care facilities, including Ascension Medical Group’s medical offices. Providence is a full-service facility with 24/7 emergency care, a Level III trauma center, an outpatient diagnostic center, and a freestanding rehabilitation and wellness center.

USA and Providence Hospital will continue to operate independently until the transaction closes.

dr John Marymont, vice president of medical affairs and dean of Frederick P. Whiddon College of Medicine at the University of South Alabama, said there were no plans for layoffs. Providence currently employs about 2,100 people, he said.

“On the contrary,” Marymont said. “We welcome her into our family. We have great ambitions to ensure a smooth transition and provide more services and opportunities for Alabama and Gulf Coast healthcare. I think this will enrich both hospitals.”

Marymont said USA Health and Ascension had been in discussions about a potential partnership for the past six years and said he was confident about the transaction. Ascension Health, a system with 138 hospitals in 19 states, ended its most recent fiscal year with a net loss of $1.8 billion amid rising operating costs.

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“We have performed an extreme level of due diligence and are confident in evaluating the opportunity,” said Marymont.

Bailey said for USA Health the past five years have been “a period of explosive growth,” where the healthcare system has grown from about seven locations in 2016 to about 30 within the Mobile region.

USA Health is the only academic healthcare system on the upper Gulf Coast and operates University Hospital at Mobile, Children’s and Women’s Hospital and the Mitchell Cancer Institute.

“We are at and exceeding capacity in our USA Health hospitals,” Bailey said. “This (transaction) is about having three hospitals instead of two and what that means to have more options for housing patients. Instead of being negative, it will be positive.”

He added, “When you’re growing as fast as we are, you have to make important decisions about what’s best for patients.”