Hello Bre:
I have done some checking for you and I believe that the "Sister Hospital" you are looking for was in St. Louis, MO. The Sisters of Charity ran it starting sometime before 1844.
I located a James Watkins in Bonhomme, St. Louis County, MO. in 1860. He was 35, born in KY. He was a Railroad Watchman. There was a Mary J. Watkins, age 5 born in MO. This matches the info you had from Perry Co., IL. There were other children in the household with the last name of Mainard. I have not yet determined who they are, but it is possible they were related to James or his wife.
Sharon