A group of Chicago-area physicians is in exclusive negotiations to purchase Michael Reese and Grant Hospitals in Chicago from Columbia/HCA Healthcare Corp (see January, page 13).
If the physicians succeed, the purchase will prevent the hospitals' being closed; both have faced financial struggles in recent years. Michael Reese is a 845-bed tertiary-care teaching hospital on Chicago's South Side, and Grant is a 445-bed community, acute-care hospital on the city's North Side.
The 600 physicians involved -- the Reese-Grant Acquisition Group -- have formed a partnership with Doctors Community Healthcare Corporation of Scottsdale, Ariz., to purchase the hospitals. RGAG signed an exclusive letter of intent late last month.
Though the physicians will not discuss the exact terms of the sale, they did say Doctors would put up most of the capital for the purchase and be the majority owner, while governance would remain with RGAG.
RGAG is comprised of active physicians from the Reese and Grant staffs; Doctors is a for-profit hospital management company that owns and operates Boston Regional Medical Center, which is currently being converted from nonprofit to for-profit status, and three for-profit hospitals. RGAG and Doctors are now in the fact-finding process known as due diligence; the sale is expected to close some time in the next few months.
Columbia, which is embroiled in an ongoing federal fraud investigation, put the two hospitals on the block in December as part of a massive restructuring. An integral component of the purchase plan is a unique partnership with employees and the community, according to Doctors spokeswoman Sharon Kirsch. Physicians, hospital employees and members of the community all will be asked to invest in the hospitals, she says.
"We are all people who are working in this community and who understand the healthcare needs of this community," says RGAG president Enrique Beckmann, M.D. "We want to involve the community in making decisions about its healthcare."