KANSAS CITY, MO. — The Saint Luke’s Health System announced on Wednesday it plans to merge with BJC HealthCare of St. Louis.
Both systems plan to keep separate headquarters and maintain their existing brands.
It was not yet known what impact, if any, the merger might have on Allen County Regional Hospital, which is managed by Saint Luke’s.
In a joint press release, the entities expressed their intention to form a patient-centric integrated health care system. The new system will use innovative methods to enhance the quality, access and affordability of care, and reduce health disparities, according to the press release.
The combined entities have about $10 billion in revenue and are both non-profit health organizations. The two systems operate the top three hospitals in Missouri, according to the U.S. News & World Report.
BJC’s President and CEO Richard Liekweg is expected to serve that role for the integrated health system, while the initial board chair will come from Saint Luke’s.
“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,” Liekweg said.
Saint Luke’s CEO Melinda Estes said that both systems have well-established reputations for quality health care and a long relationship of working together, so coming together as one integrated system is a “logical next step.”
The St. Louis Post-Dispatch reported on the merger as an example of an industry trend of consolidation among both hospitals and insurers.
The newspaper interviewed Ge Bai, a professor of accounting and health policy at Johns Hopkins University, who said insurers and health providers alike grow larger to gain advantage in negotiations.
“The market and regulatory environment is less and less friendly to small players,” Bai told the Post-Dispatch. “So how can hospitals survive? Become more powerful.”
According to the article, hospitals continue to struggle with revenue as a result of the COVID-19 pandemic. Patients had to defer elective procedures. A shortage of nurses and physicians has forced hospitals to compete with higher pay and better benefits.
“Back-office streamlining in a larger system could free up cash for higher salaries,” according to the article.
BJC operates 14 hospitals in eastern Missouri and southern Illinois, and is one of the largest employers in the St. Louis region with over 30,000 employees.
Saint Luke’s operates 14 hospitals in western Missouri and eastern Kansas, with over 12,000 employees.
