St. Anthony Hospital, on the city’s Near South Side, is splitting from Ascension Health, the nation’s largest Catholic hospital network.

St. Anthony CEO and president Guy Medaglia, who joined the hospital two years ago, says a financial turnaround gave the hospital the positioning to set out on its own.

The hospital posted a $12 million deficit in fiscal 2007, and finished its last fiscal year in the black by $730,000, Medaglia says.

Medaglia predicts the hospital will make about $3.5 million in fiscal year 2009, which has just ended. He cites an increase in revenue due increased patient visits, surgery cases and in-patient stays for the turnaround.

“It really doesn’t make sense for us” to remain in the Ascension network, he says. “We really want to be a free-standing Catholic hospital.”

As the only Ascension hospital in the state, St. Anthony didn't feel that it had the negotiating power that comes with a network. Medaglia brokered a deal with FTI Healthcare, a Brentwood, Tenn-based consultancy of which he is also a managing partner, allowing the hospital to maintain negotiating power.

With its new independent status, Medaglia says St. Anthony is better positioned to act as a community hospital. In the past two years, it has reached out to the largely African-American and Latino community to re-establish itself as a community resource.

“We’re able to do more of that as an independent hospital,” he says.

Steve LeResche, vice president of communications for Ascension Health, says the network is supportive of St. Anthony’s decision to leave, which took place July 1.

“After significant consideration, both organizations have determined that Saint Anthony’s next phase of community hospital service can best be achieved as an independent healthcare facility,” LeResche says. “Hospitals like Saint Anthony’s have deep, historical roots in their communities and have created unique models for healthcare delivery to the people they serve.”

In recent years, the hospital has strengthened its ties to the community, improved its patient-care facilities, increased the number of new patients and surgeries, and opened a new emergency department.

Dr. Mohammad Chaudhary, president of the St. Anthony medical staff, says the hospital will be better able to respond to the needs of the community as an independent hospital.

“The administration and the physicians know the neighborhoods and we are most familiar with our patients’ specific needs. Being able to make decisions on a local level makes excellent sense,” he said in a statement.

Peter Fazio, chairman of the St. Anthony board of directors, agreed.

“As a very small community-oriented hospital, you’ve got to be very flexible, and you’ve got to make decisions quickly and respond to things quickly,” he says.  “It just made sense to us that if we were going to be a hospital that focused very specifically on our little community, we would be better off if we were on our own.”

St. Anthony's joined Ascension in 2002.