A look back to when SSM first tried to buy Saint Louis University Hospitals | St. Louis Public Radio

A look back to when SSM first tried to buy Saint Louis University Hospitals

Jun 2, 2015

The Monday announcement that nonprofit, Catholic SSM Health is acquiring Saint Louis University Hospital, the medical school's teaching facility, from for-profit Tenet was expected by many St. Louisans — expected, that is, nearly a generation ago.

In 1997, the SSM network lost its bid to buy the SLU medical complex at Grand Boulevard and Vista Avenue. The battle pitted the archbishop against the Jesuit-run university and divided rank-and-file Catholics.

Sister Mary Jean Ryan, who was president and CEO of the SSM system in 1997, is now pleased that SSM has a chance to fulfill its health and teaching mission at the urban hospital. “It makes perfect sense,” she said. Though she has stepped down from leading the system, she chairs four SSM boards, is a member of the International Academy for Quality and a respected speaker on health-care quality. Indeed, under her leadership, SSM's hospital system received the Malcolm Baldridge National Quality Award, the first healthcare system to get the prestigious service award.

SSM Health, based in St. Louis, runs 19 Midwestern hospitals and 60 outpatient facilities, now including Cardinal Glennon Children's Hospital. SSM's maternity department and newborn facilities at St. Mary Medical Center in Richmond Heights has long been a SLU Med School teaching facility.

Credit Provided by Saint Louis University Hospital

Back to 1997: SSM’s bid to buy the university hospital was in partnership with Unity Health System (then composed of St. John's, St. Luke's and St. Anthony's hospitals in St. Louis County). But the university’s 50-member board, which included just 10 Jesuit priests (none on the university faculty), voted to sell the Catholic hospital to the highest bidder, Tenet. Over the summer before bidding began, potential buyers were told that the bottom line was not going to be the determining factor.

Tenet, an investor-owned chain, bid $303.2 million. Under Missouri law money from a sale of a nonprofit that had never paid taxes to a for-profit had to be used only for the nonprofit’s initial mission — health.

The SSM-Unity partnership bid $183.2 million to $192.5 million but even though it was so much lower, it had a couple things going for it. One, it was a Catholic group and two, because that partnership was a nonprofit, the university could use its money however it wanted. Both bids included promises to improve the multi-building hospital property.

SLU's then-president the Rev. Larry Biondi, in one of his few public statements about the sale, told 600 people at a public hearing on the matter: "We were deeply and repeatedly disappointed that the proposal they (the partnership) put forth fell far short of the university's needs and the criteria we established to define these needs."

The archbishop at the time, Justin Rigali, strongly opposed the sale to the secular Tenet. Under church law, as underlined in the papal encyclical "Ex Corda Ecclesiae" (Latin for "From the Heart of the Church") a local bishop has moral responsibility for Catholic universities and schools within his diocese. They also have responsibility for ethical issues at Catholic hospitals. Rigali took that seriously.

Rigali got public backing for trying to insert himself into the sale decision, from the late Cardinal Francis George of Chicago; Bishop Donald Wuerl, then of Pittsburgh now Cardinal and archbishop of Washington, D.C.; and the rector of the Pontifical North American College in Rome, now New York's archbishop, Cardinal Timothy Dolan. Several SLU Jesuits, including the late Rev. John F. Kavanaugh, and internationally respected author who taught ethics at the medical school; scores of St. Louis nuns; doctors;  and even Vatican official Monsignor Giuseppe Baldazzo told this reporter on the record of their strong opposition to the sale to a for-profit chain.

Many at the Vatican they feared the mission of charitable work to the poor would be lost to stockholders’ demands. In November 1997, another Vatican official said it was "worrisome" that the U.S. government had fined Tenet $362 million for medical and insurance fraud. That sullied reputation worried many of the SLU doctors who spoke only off the record.

But the sale went through, and health-care issues have not made headlines.

Still, on Monday, the now-retired Cardinal Rigali was airborne on flights from Rome to Knoxville, Tenn., where he now lives. His staff and friends said they had no doubt that he will be very pleased that the university's teaching hospital will be part of a Catholic system again. They noted that the announcement came on the cardinal's patron saint's feast day. Monday's Catholic masses around the world celebrate the feast of St. Justin, a martyr.