Prime Healthcare to Acquire Olympia Fields Hospital, Deepening Illinois Roots

OLYMPIA FIELDS, IL – January 16, 2026 – In a significant move that further reshapes the Chicagoland healthcare landscape, Prime Healthcare has entered into an asset purchase agreement to acquire Franciscan Health Olympia Fields from Franciscan Alliance. The deal includes the 214-bed hospital and its affiliated physician group, Specialty Physicians of Illinois, LLC, marking Prime’s second major expansion into the state in just over a year.

The acquisition signals a strategic divestment for Franciscan Alliance, as the Olympia Fields hospital was its only facility in Illinois. For Prime Healthcare, a physician-led system known for acquiring community hospitals, the transaction solidifies its growing presence and commitment to the region. The deal is now pending regulatory approval, a process that will be closely watched by community members, employees, and healthcare advocates.

Prime's Growing Illinois Footprint

This agreement comes on the heels of Prime Healthcare’s substantial entry into the Illinois market in early 2025, when it completed the acquisition of eight hospitals and several post-acute care facilities from Ascension Illinois. Since that time, the California-based health system reports it has invested over $104 million in upgrading those facilities with new technology, equipment, and systems, part of a larger $250 million capital commitment.

The addition of Franciscan Health Olympia Fields brings Prime’s national portfolio to 51 hospitals across 14 states. Company leaders framed the acquisition as an extension of their core mission.

“Our agreement with Franciscan Alliance reflects Prime Healthcare’s enduring mission to save, strengthen and invest in community hospitals,” said Dr. Sunny Bhatia, President and Chief Medical Officer of Prime Healthcare, in a statement. He emphasized a commitment to stewarding the hospital with “compassion, integrity, and a commitment to clinical excellence and compassionate care for all.”

Prime’s business model often involves purchasing hospitals, sometimes struggling ones, and implementing its operational playbook to improve financial stability and clinical outcomes. The company is nationally recognized for quality, having received numerous awards from Healthgrades for patient safety and accolades from organizations like The Leapfrog Group and the Lown Institute for health equity and social responsibility.

A Lifeline or a Shake-Up for the South Suburbs?

The acquisition brings both promises of stability and questions about the future of services for the South Suburbs. Prime has made several key commitments as part of the deal. The company has pledged to offer employment to “substantially all” current hospital employees, a move aimed at ensuring workforce continuity and assuaging job security fears. It also plans to continue the hospital's existing charity care policies and community benefit programs.

Furthermore, Prime has committed to a $5 million philanthropic contribution to support the expansion of medical education through Franciscan’s programs. This aligns with Prime's broader investment in training future physicians, highlighted by its non-profit foundation’s establishment of the California University of Science and Medicine.

However, Prime’s recent track record in Illinois has also drawn scrutiny. Following its acquisition of the Ascension facilities, the health system eliminated certain services at several hospitals, including obstetrics, pediatrics, and trauma care in locations such as Kankakee, Joliet, and Aurora. Prime Healthcare defended these decisions, citing low patient volumes that made the services financially unsustainable. These cuts prompted criticism from Illinois’ U.S. Senators Dick Durbin and Tammy Duckworth, raising concerns about diminishing access to essential care in some communities.

For residents of Olympia Fields and surrounding areas, the central question is whether Prime will be a stabilizing force that invests in and enhances local care, or if its operational model will lead to a similar consolidation of services. Community leaders will be looking to see if Prime’s promise to honor the hospital’s legacy translates into maintaining the full spectrum of care the community has relied on for decades.

Franciscan Alliance's Strategic Pivot

For Franciscan Alliance, the sale marks a strategic withdrawal from the Illinois market. The Indiana-based Catholic healthcare system operates 11 other hospitals, all located in its home state. The Olympia Fields facility stood as a geographic outlier, and its divestment suggests a strategic decision to consolidate operations and focus resources on its core service area.

Franciscan leadership expressed confidence that Prime was the right successor to continue the hospital's mission. The selection followed what was described as a “comprehensive review process” that evaluated potential buyers on mission alignment, ethical commitments, and the ability to ensure long-term sustainability.

“Franciscan Health Olympia Fields has a legacy of service, and we believe Prime Healthcare is uniquely positioned to carry that mission forward,” said Frank J. McHugh, Interim President and CEO of Franciscan Health Olympia Fields. He added that Prime’s “proven ability to strengthen hospitals while honoring values-based care gives us hope and confidence in the future of access and quality for the South Suburbs.”

Prime’s experience operating Catholic hospitals, gained through the Ascension transaction which required endorsement from the Archdiocese of Chicago, was cited as a central factor in Franciscan's decision. This experience likely provided assurance that Prime could navigate the cultural and ethical values central to a faith-based institution.

Navigating the Regulatory Path

The transaction is not yet final. It is subject to a thorough review and approval by the Illinois Health Facilities and Services Review Board (IHFSRB), the state body that oversees hospital sales and changes in healthcare services. Other customary regulatory approvals are also required.

Based on the timeline of Prime’s previous acquisition in Illinois, this process could take several months. The Ascension deal, for example, received IHFSRB approval approximately five months after the initial agreement was announced, with the transaction closing a few months later. During this review period, both Prime Healthcare and Franciscan Health Olympia Fields will continue to operate as independent entities.

The IHFSRB review will likely examine the potential impact of the ownership change on healthcare access, costs, and quality in the region. The board will consider Prime’s financial commitments, its plans for the hospital's workforce, and its strategy for services as it determines whether the acquisition serves the best interests of the community. The outcome of this review will ultimately decide the next chapter for this vital South Suburban healthcare institution.