Ontario, Calif.-based Prime Healthcare’s CFO said the system saw “real stability and growth” across its markets in 2025 despite challenges stemming from reimbursement and the One Big Beautiful Bill Act.
While many organizations were considering consolidation to ensure stable and operational efficiencies, Steve Aleman said the system was already positioned to weather the headwinds.
“We were already focused on operational efficiencies,” he told Becker’s. “I would say we’re somewhat ahead of the curve. Really in all of our markets we experienced unprecedented volume growth, which certainly led to growth in revenue, in earnings and we saw that across the board.”
That growth was highlighted through the mid-February acquisition of Central Maine Healthcare in Lewiston from Prime’s nonprofit public charity Prime Healthcare Foundation.
Prime looks at two criteria when acquiring facilities. When entering a new market, Mr. Aleman said the system looks to acquire a cluster of facilities that offer some market presence and synergies across acute care and outpatient services. For existing markets, Prime looks for “tuck-in” opportunities, or standalone facilities that are well-supported by their communities, carry strong patient volume and emergency department activity, and need a capital partner to invest and apply Prime’s “operating playbook.”
Mr. Aleman also pointed to Prime’s March 2025 acquisition of eight Illinois hospitals from St. Louis-based Ascension; the system was able to stabilize them.
“These were all severely struggling facilities, losing $100-plus million, $200 million if you go back a couple of years through the 2022 process,” he said. “We’re happy with the improvements that we’ve made. There were certainly ongoing challenges from a cash conversion standpoint that we’re hoping turns around, but we’re still very positive as it relates to what the market will bring.”
Prime is looking to grow its presence in Illinois with the planned acquisition of Mishawaka, Ind.-based Franciscan Alliance’s Franciscan Health Olympia Fields (Ill.), which would be the health system’s ninth facility in the state. Regulatory approval is anticipated on April 14.
“Olympia Fields is an example of further investment we’re making to the state, which is an indication that we feel good once again,” Mr. Aleman said. “We’re bullish on these acquisitions that we’ve made. We’re bullish on the Chicago market.”
Prime is not alone in growth pursuit outside its home market. In mid-March, Sacramento, Calif.-based Sutter Health and Minneapolis-based Allina Health signed a letter of intent for Allina to join the health system, which would create a 39-hospital combined nonprofit organization across California, Minnesota and Wisconsin. It is a non-adjacent acquisition trend that Mr. Aleman expects to continue in healthcare.
“Systems are looking at their various presence in markets and how they can better align to provide diversification against the potential headwinds that are coming up,” he said. “I absolutely do think it will continue.”
Looking ahead to 2026, Mr. Aleman said the system anticipates similar growth, though it might be slightly muted.
“It looks like everything is still at play and we have a real opportunity as our operations really begin to get further ingrained into the Illinois operations,” he said. “We should see the financial operating performance of those facilities improve, which should lead to further growth in ’26 on a consolidated basis.”
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