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Healthcare Business News
 
Sherman Health, Elgin, Ill.
When Sherman Health opened its new hospital, it doubled its debt. The system, which has been looking for a partner for at least a year, has net operating revenue of $308 million.

Regional News/Midwest: Advocate Healthcare to purchase Sherman Health Systems, and other news


By Modern Healthcare
Posted: October 27, 2012 - 12:01 am ET
Tags:

CHICAGO—Presence Health plans to move its headquarters to downtown Chicago, the company and city announced last week. The move will put 200 workers in the same place, according to city officials. “A downtown location is central to the agencies and businesses with whom we frequently interact and furthers our goals to provide broader access to community healthcare,” Presence President and CEO Sandra Bruce said in a statement from the city. Presence Health was formed in the merger last year of Mokena, Ill.-based Provena Health and Chicago-based Resurrection Health Care. The current corporate offices are in the southwest suburb of Mokena and on Chicago's northwest side.

Crain's Chicago Business


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SPRINGFIELD, Ill.—Illinois Gov. Patrick Quinn's administration passed over University of Chicago Medicine and the University of Illinois Hospital & Health Sciences System, Chicago, to run pilot programs designed to cut Medicaid costs, picking six ventures led mostly by not-for-profit organizations without hospitals. Mercy Hospital & Medical Center, Chicago, and Nashville-based Vanguard Health Systems, which operates four hospitals in the Chicago area, also were not chosen among 20 total bidders in the first phase of a plan to enroll half of the state's 1.2 million Medicaid recipients into programs in which providers will share some of the financial risk of care by 2015. Instead of such well-known hospitals, the winning bidders include a venture featuring two Chicago safety net hospitals, Norwegian American Hospital and Methodist Hospital of Chicago. Also among those chosen last week were ventures led by social service agency Heartland Alliance and Medicaid provider Family Health Network, state officials said. The winning bidders will receive three-year contracts to provide care in exchange for a capitation fee. The fixed fees will start after a transition period during which each bidder will care for up to 1,000 patients. Key terms of the agreements, including how many patients will be covered, must still be negotiated. In making the selections, the Illinois Department of Healthcare and Family Services wasn't avoiding hospitals, but simply wanted to try different approaches, HFS Deputy Administrator Jim Parker said. Losing bidders could still be added over the next six months.

Crain's Chicago Business


ELGIN, Ill.— Advocate Healthcare has signed a letter of intent to acquire Sherman Health Systems, a move that will likely intensify competition for patients in Chicago's northwest suburbs. Sherman's board voted Oct. 22 to pursue a deal with Advocate, Sherman and Advocate said in a joint statement. If an agreement is reached, Oak Brook, Ill.-based Advocate would become the parent company of Sherman. Sherman, with net operating revenue of $308 million in fiscal 2012, has been looking for a partner for at least a year. In December 2009, Sherman opened its new 226-bed hospital, which attracted new patients but doubled the hospital's debt to $300 million. For Advocate, with 2011 revenue of $4.4 billion, acquiring Sherman would extend its reach along the heavily populated Interstate 90 corridor. Advocate, the largest system in Illinois, has nine hospitals, most of them in and around Chicago. Sherman Hospital is about 15 miles southwest of Advocate Good Shepherd Hospital in Barrington, Ill., and 30 miles west of Advocate Lutheran General in Park Ridge, Ill. “Through this partnership, Sherman will be able to grow and expand our services at an accelerated pace to become a distinctive, regional destination for care,” Sherman CEO Rick Floyd said in the statement. Advocate and Sherman expect to finalize a deal between May and July. Sherman had narrowed its choices to Advocate and Winfield, Ill.-based Cadence Health System, a two-hospital network. A spokesman for Cadence said that while Sherman's decision was “disappointing, this was only one of many growth opportunities we are currently exploring.”

Crain's Chicago Business



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