The boards of Northwestern Memorial HealthCare and Cadence Health have approved an agreement to merge the two health systems into one, potentially creating a regional network of four hospitals that would bring in nearly $3 billion a year in revenue.
The combined system would operate under the Northwestern Medicine name and be headed by current Northwestern CEO Dean Harrison. The systems said in March they were in discussions to merge.
“Together, we are better-positioned to provide care that is safer, more effective and better coordinated, that utilizes the latest breakthrough treatments, and is accessible closer to where our patients live and work,” Mr. Harrison said in a statement today announcing the approvals.
From here, the merger must be approved by the Illinois Health Facilities Services and Review Board. It also has to pass muster with antitrust authorities at the Federal Trade Commission. The systems expect the regulatory phase will occur in the summer, with the merger closing sometime in fall.
Anchored by 894-bed Northwestern Memorial Hospital, the Chicago area's largest, Northwestern Memorial HealthCare posted $131 million in operating income on $1.71 billion in revenue in the year that ended Aug. 31, 2013. Revenue and income are sure to be higher in 2014 because the system, which also includes 201-bed Lake Forest Hospital, acquired the Northwestern Medical Faculty Foundation, with its nearly 1,000 physicians, from its namesake university in September.
Meanwhile, Cadence, which includes 333-bed Central DuPage Hospital in Winfield and 159-bed Delnor Hospital in Geneva, posted $123.6 million in operating income on $1.13 billion in total revenue, according to financial statements for the year ended June 30, 2013.
"Northwestern Memorial HealthCare, Cadence approve merger" originally appeared in Crain's Chicago Business.
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