SSM Health, OU Medicine to form joint operating company

November 15, 2016


SSM Health's central Oklahoma organizations plan to form a joint operating company by mid-next year with the University of Oklahoma's OU Medicine and with the state agency that financially supports OU Medicine. That joint operating company will oversee an integrated health care delivery network made up of six of the partners' 23 central Oklahoma hospitals and affiliates and the more than 1,100 physicians connected with SSM Health and OU Medicine. Three of the hospitals are academic medical centers.

Currently, Nashville, Tenn.-based HCA has an ownership stake in OU Medicine's OU Medical Center in Oklahoma City and OU Medical Center Edmond in Edmond, Okla., through a joint operating agreement that HCA forged in 1998 with the state agency supporting OU Medicine. HCA plans to transfer its ownership stake to the joint operating company that SSM Health, OU Medicine and the state agency will create. The state agency is called the University Hospitals Authority and Trust.

In addition to its termination of its joint operating agreement with the Authority and Trust agency, HCA is ending its lease of a children's hospital at OU Medical Center. HCA said that it will receive $750 million "in consideration" at the end of the agreement.

The joint operating company that SSM Health, OU Medicine and the Authority and Trust agency will form will be a secular, not-for-profit organization with governance authority over all of the SSM Health and OU Medicine facilities covered by the agreement (see sidebar). That is according to William P. Thompson, president and chief executive of St. Louis-based SSM Health. He said a 14-member board will oversee the joint operating company. SSM Health will appoint seven members of the board; and OU Medicine and the Authority and Trust agency together will appoint seven.

Under this structure, SSM Health will retain certain reserve authority but will share significant decision-making power with OU Medicine and the Authority and Trust agency. SSM Health will provide management services for the facilities under the joint operating company. SSM Health also will select the joint operating company's president and chief executive. The 14-member board must approve the selection.

Thompson said under the joint operating agreement, the SSM Health and OU Medicine facilities' revenue will be combined; and their expenses will be shared out of a common revenue base. The remainder primarily will be retained by operations to service debt and make capital investments. SSM Health and the state agency will share financial responsibility for the joint operating company.

Thompson said the joint operating company's integrated delivery network will provide an ideal infrastructure to promote the sharing of best practices and the development of standardized care pathways among SSM Health and OU Medicine clinicians.

Plans call for all OU Medicine facilities to install Epic, the same electronic health record system that SSM Health uses. Also, the organizations will form a joint physician council. SSM Health and OU Medicine physicians on the council will make recommendations about research priorities, operational issues, the implementation of best practices and other topics. Also, said Thompson, specialty groups from both provider networks likely will collaborate.

"We'll be doing our best to integrate our community physicians with the academic physicians, and I think there is a lot of synergy here," said Thompson.

According to the Oct. 26 announcement of the joint operating company, SSM Health and the state agency have agreed to make "significant investments in the integrated network," including investments by the joint operating company in a new patient tower at OU Medical Center.

The partners were not ready to disclose financial specifics of the partnership at the time Catholic Health World went to press.

Thompson noted that currently some of the OU Medicine facilities that would fall under this deal have historically provided women's services that run counter to the Ethical and Religious Directives for Catholic Health Care Services. OU Medicine has agreed to respect SSM Health's Catholic values and will discontinue those services at facilities that fall under the joint operating agreement.

In addition to federal approvals, the partners' agreement will require the approval of Oklahoma's Contingency Review Board, which is staffed by the governor and the leaders of the Oklahoma House of Representatives and Senate. If that board approves the agreement, it goes to the state supreme court for approval.

Composition of joint operating company

SSM Health's central Oklahoma facilities include:

  • St. Anthony Hospital of Oklahoma City, which recently completed a $220 million expansion
  • The Bone and Joint Hospital at 
    St. Anthony
     in Oklahoma City
  • St. Anthony Shawnee Hospital in Shawnee, Okla.
  • Four freestanding emergency departments called St. Anthony Healthplexes
  • The St. Anthony Physician Group, with more than 180 physicians and other providers

OU Medicine includes:

  • OU Medical Center in Oklahoma City
  • The Children's Hospital at OU Medical Center
  • The OU Medical Center Edmond in Edmond, Okla.
  • The OU Medicine Breast Health Network, with multiple central Oklahoma locations


Copyright © 2016 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Copyright © 2016 by the Catholic Health Association of the United States

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