A mega-merger of religious hospitals in the Chicago area moved forward last week with the signing of a letter of intent to unite.
With $1.2 billion in combined revenues, EHS Health Care of Oak Brook, Ill., and Lutheran General HealthSystem of Park Ridge, Ill., would merge under one board with co-chief executive officers. The two systems have had a history of impasses in trying to get together.
"The merger would bring together two strong community-based managed-care organizations capable of offering a full continuum of healthcare services to the entire Chicago region, from the Wisconsin to the Indiana borders," said Richard Risk, EHS' president and CEO.
The announcement was expected after executives said last month they were in delicate and confidential stages of discussions after talking for three to four months (May 16, p. 48). The proposed merger would be a natural for the two, which already have a joint managed-care venture, Health Direct, that taps a patient base of 250,000 between the two hospitals.
The systems vowed to make an impact on an increasingly competitive Chicago market. Together, they would have nearly 3,000 acute-care hospital beds, 177 sites of care, 3,550 physicians and some 19,000 employees.
EHS, sponsored by the United Church of Christ, owns five hospitals and is affiliated with another system, Ravenswood Health Care Corp. Lutheran General is sponsored by the Evangelical Lutheran Church in America. The new 18-member board will include nine members from Lutheran General, eight from EHS and one from Ravenswood.
Mr. Risk and Stephen Ummel, Lutheran General's president and CEO, will serve as co-CEOs, with Mr. Risk serving as president and Mr. Ummel serving as chairman of the board.
Executives said the new organization could be operational by the beginning of next year.