CHRISTUS moves forward with joint venture in Chile

March 1, 2014


The Irving, Texas-based system CHRISTUS Health, which already has a significant international presence in Mexico, has finalized its joint venture agreement with a Catholic university to manage and partially own a Chilean health system. CHRISTUS Health's President and Chief Executive Ernie Sadau said CHRISTUS also is working to build additional relationships in Latin America, learning more about health care needs there and places where growth would fit with the system's strategy.

Leaders of CHRISTUS Health and the Pontificia Universidad Católica de Chile signed documents in December to finalize their joint venture in Chile. CHRISTUS will have a 40 percent stake in the university's health system, and the university will retain a 60 percent ownership position. About a half dozen CHRISTUS senior executives will be placed with the Chilean system, and the board of the joint venture will report to CHRISTUS Health's board. The new name of the network is Red de Salud UC CHRISTUS.

Dr. Ignacio Sánchez, president of the Pontificia Universidad Católica de Chile, left, and Ernie Sadau, president and chief executive of CHRISTUS Health, stand in front of new signage at the university's hospital in downtown Santiago, Chile, that shows the name of the new joint venture, Red de Salud UC CHRISTUS.

The system is comprised of a teaching hospital, a partnership in a second hospital, and 11 outpatient clinics throughout Santiago, Chile's capital. CHRISTUS did not disclose financial information related to the transaction.

Sadau said CHRISTUS leadership including its board and its two sponsoring congregations — the Sisters of Charity of the Incarnate Word of Houston and of San Antonio — took a close look at CHRISTUS' international presence about three years ago; the system already shared ownership in Mexican hospitals through the CHRISTUS Muguerza system, which CHRISTUS manages. "The commitment was made at that time to be more focused and strategic about where we would grow," said Sadau.

CHRISTUS conducted its own research and met with outside economic advisors and investment bankers, determining which countries would best align with CHRISTUS' mission and vision for growth in health care. The system decided it would be open to joint ventures in Chile, Colombia, Peru, potentially Panama and Costa Rica, and more opportunities in Mexico. CHRISTUS would consider full ownership ventures, but "to enter a country, we felt like it was best to joint venture," Sadau said.

Currently, the CHRISTUS Muguerza partners own nine hospitals in Mexico. CHRISTUS is the majority partner. "We're the second largest private health care system in Mexico," Sadau said of CHRISTUS Muguerza.

Pontificia Universidad Católica started searching for a strategic partner two years ago, recognizing that growing competitiveness and a rapidly changing health care environment required new forms of management and investment to maintain and grow its performance. After considering a dozen outside proposals, the university selected CHRISTUS in October 2012 as the sole finalist to pursue negotiations toward the joint venture, the systems said in a statement.

Both systems hope to learn from the other. Sadau noted the Chilean health system, which has about 600 beds, is a major teaching facility and tertiary referral center. It also operates two clinics in Santiago that minister to the underserved and those who are in need, he said. Chile has a strong economy, a growing middle class and provides universal health care.

CHRISTUS began managing the Chilean system last year, and will make capital investments in infrastructure and equipment. It also will look at other facilities in the market to potentially invest in or acquire that add value for the network, he said.

CHA's President and Chief Executive Officer Sr. Carol Keehan, DC, visited Santiago in January and said the university, its health system and CHRISTUS would benefit from the strengths of the other organization. "You see the mutual commitment to the quality of education, to the quality of patient care, the special attention to the programs they've set up that care for the poor." She said while visiting a clinic in a low-income area, it was clear that patients there were receiving quality care, and that there was great attention to the dignity of the person.

Next up, CHRISTUS plans to hold a Latin America summit in Bogota, Colombia, where representatives from Catholic universities in Chile, Peru, Colombia and Panama will gather to discuss the needs in health care. Sadau said they'll discuss: "how can we as Catholic organizations with common values, common mission and faith go about partnering to minister to these needs?" The plan is that the gathering will allow the organizations to "develop strategies together and opportunity for growth in some of these markets," he said.


Copyright © 2014 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2014 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.