Four South Chicago hospitals pursuing $1.1 billion merger into one healthcare system

By | January 24, 2020

Four hospitals on Chicago’s South Side have announced plans to merge into a single healthcare system in a deal estimated to be worth $ 1.1 billion. The deal, if completed, would create one new hospital and a network of community health centers.

Advocate Trinity Hospital, Mercy Hospital & Medical Center (a member of Trinity Health), South Shore Hospital and St. Bernard Hospital announced Thursday they had signed a nonbinding agreement to create the new system. The still-hypothetical new entity’s goals will be to expand access to preventive care and quality services, reduce drastic health inequities and provide economic development, jobs and training programs in the region.

The providers are calling on neighborhood leaders and area residents to participate in a series of community input sessions to help shape solutions tailored specifically to the needs of the community.

WHAT’S THE IMPACT

In making the announcement, the hospitals cited persistent health inequities in the region despite effort and investment from the State of Illinois and the local community.

Significantly lower life expectancy, higher incidences of chronic disease and other disparities are aggravated by social determinants of health including food insecurity, housing and trauma. The four providers said addressing these inequities was a key driver for the need to develop a progressive, patient-centered approach and delivery model.

The goal of the new system is to combine the four hospitals into an independent, integrated healthcare system that will improve care delivery for area residents through a multi-year investment plan.

After analyzing community health needs assessments and service area and demographic data, the four providers arrived at two primary needs: expand access to quality primary and preventive care services by constructing community health centers, and build at least one new, state-of-the-art, destination hospital, thereby replacing outmoded, aging facilities.

The community input component will help shape future hospital services, plus the expansion of urgent care, ambulatory surgery, infusion therapy and behavioral health services at the new community health centers, as well as specialty care, imaging and diagnostic services. Stakeholder outreach has already begun, and community input sessions will begin in February.

The group said it is committed to ensuring new facilities open before any existing facilities close. It also promised a net increase in jobs in the region, and redeployment and retraining programs that are “reflective of the growing healthcare jobs of the future.” They will seek significant private philanthropic involvement to support the new system.

Under the agreement, each provider will contribute or transfer existing hospital assets to help capitalize the new system. The new system will have independent leadership and an independent board of directors, which will include a delegate from each provider. A CEO and leadership team will be named following the signing of a definitive agreement, expected by midyear.

THE LARGER TREND

When a merger or acquisition occurs in healthcare, the conjoining providers often say that patient experience will benefit as a result. But findings published in the New England Journal of Medicine this month suggests that may not be the case.

In fact, the study found just the opposite: Acquired hospitals actually actually saw a patient experience that was moderately worse, on average. What’s more, 30-day mortality and readmission rates stayed largely the same at such facilities.

The only real improvement that was found among the majority of acquired entities was in the realm of clinical process, which improved modestly. But the improvement was so incremental that it couldn’t be linked to the actual acquisition, and prices for commercially insured patients tended to be higher.

ON THE RECORD

“Working individually, our hospitals will not be able to provide sustained, quality care on the South Side,” said Charles Holland, president and CEO of St. Bernard Hospital. “We have to aggressively address the need for better healthcare among tens of thousands of Chicagoans. By forging a system that can better respond to and manage the chronic illnesses that are so pervasive in our communities, we can truly achieve greater health equity and narrow significant disparities in access to quality care and the resulting outcomes.”

“This is the right thing to do for those we serve,” said Rashard Johnson, president of Advocate Trinity Hospital. “We have a moral obligation to address health equity and that requires a transformational approach to how, when and where we deliver care.”
 

Twitter: @JELagasse

Email the writer: jeff.lagasse@himssmedia.com

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