Home Industries Health Services Prospect sells R.I. medical group, other assets, to California-based company

Prospect sells R.I. medical group, other assets, to California-based company

By

Katie Castellani

-

11/13/2024

PROSPECT MEDICAL Holdings, which is in the process of selling Roger Williams Medical Center and Our Lady of Fatima Hospital, shown above, announced Friday it is is unloading businesses across the country, including its Rhode Island accountable care organization. / PBN FILE PHOTO/MICHAEL SALERNO — PROSPECT MEDICAL Holdings, which is in the process of selling Roger Williams Medical Center and Our Lady of Fatima Hospital, shown above, announced Thursday it is is unloading businesses across the country, including its Rhode Island accountable care organization. / PBN FILE PHOTO/MICHAEL SALERNO

PROVIDENCE – Prospect Medical Holdings announced Thursday that it is unloading businesses across the country, including its Rhode Island accountable care organization. Prospect Health Services RI Inc. is one of four assets and businesses Astrana Health Inc. is purchasing for $745 million. California-based Astrana is planning to purchase the businesses and assets of Prospect Health

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PROVIDENCE – Prospect Medical Holdings announced Thursday that it is unloading businesses across the country, including its Rhode Island accountable care organization. Prospect Health Services RI Inc. is one of four assets and businesses Astrana Health Inc. is purchasing for $745 million. California-based Astrana is planning to purchase the businesses and assets of Prospect Health System, including medical groups and a health care services plan in California; medical groups in Texas and Arizona; a management service organization known as Prospect Medical Systems; RightRx, a pharmacy; and a 177-bed acute care hospital. "The acquisition of Prospect would represent the combination of two organizations with decadeslong histories of enabling independent providers and coordinating the delivery of high-quality care for all. We believe that our organizations share a common culture of patient centricity and a shared mission to provide high-quality care tailored to local communities," said Brandon K. Sim, CEO and president of Astrana. Sim said the transaction will open new opportunities for Astrana in the Orange County area, where the company currently has “limited operations.” Astrana says it plans to make “significant” investments in Prospect and its infrastructure to improve access and quality of care. Sim made no specific reference to the accountabie care organization in Rhode Island. “We are excited at the opportunity to partner with Astrana to build a larger, stronger and more coordinated care delivery network, which we expect will benefit our communities by increasing access, quality, value and efficiency,” said Jim Brown, CEO of Prospect. “We believe the strong cultural alignment, cohesive missions and clear financial and operational synergies between our companies make Astrana the ideal partner for us. We look forward to working together to further our joint mission of delivering high-quality, affordable and accessible care for all.” Astrana will fund the transaction, which is expected to close in mid-2025, with cash on hand and an approximately $1.1 billion bridge loan from Truist Bank and J.P. Morgan. The transaction is still subject to regulatory approval and closing conditions. It wasn't immediately clear whether the deal needs the approval of regulators in Rhode Island. The sale comes as Prospect, a California-based nonprofit, is finalizing the sale of CharterCARE, including two Rhode Island hospitals – Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence – to the Centurion Foundation. State regulators approved the sale of the hospitals in June with a long list of conditions. Prospect’s "change in effective control" applications were deemed complete on Oct. 7, according to a spokesperson from the Rhode Island Department of Health. From that date, the Health Services Council has 90 days to make a recommendation to RIDOH’s director whether to approve, deny or approve the application with conditions. If the application is approved, Centurion would need to apply for licensure in Rhode Island. Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.