Hundreds of millions of dollars in government funds needed to support the merger of four financially struggling hospitals on Chicago's South Side fell through Friday in Springfield, Ill.
Lawmakers were expected to approve a pool of $500 million to help facilities across the state transform in an evolving industry, and the South Side hospitals were banking on a significant piece of the pot. While lawmakers approved revisions to the state's hospital assessment program during the legislative session, that funding was left out, due partly to some elected officials expressing concern about the planned South Side merger, sources said.
Advocate Trinity Hospital, Mercy Hospital & Medical Center, South Shore Hospital and St. Bernard Hospital in January said creating a single system with one leadership team would improve healthcare in the South Side communities they serve. But the hospitals did not say where any new facilities would be located, or which of the existing facilities might close.
"We should be sure what the results are going to be before spending government money on this level—hundreds of millions of dollars. We should be able to say, 'This project will do this,' " said State Rep. Marcus Evans (D-Chicago).
The hospitals were counting on government dollars intended for hospital transformation—as well as private donations—estimating they would need a total of $1.1 billion to combine. Lawmakers said work on the hospital transformation fund will continue after the legislative session.
The merger aims to bolster the precarious finances of the safety-net hospitals that treat large numbers of low-income patients on Medicaid, which pays less than Medicare and commercial insurance. All four of the hospitals are operating in the red, with 2018 net losses ranging from $1.3 million at South Shore to $68.3 million at Mercy, according to data compiled by HMP Metrics.
Coming together could enable the institutions to generate economies of scale, improve bargaining power with insurers and suppliers, eliminate redundant expenses and cut back duplicative or underutilized capabilities. However, some elected officials and community members worry that a combination would eliminate jobs and erode medical services in certain neighborhoods—requiring patients to travel farther for care.
"We are grateful for the community support we've received for our plan to transform care and reduce health disparities on the South Side," a representative for the four hospitals said in an emailed statement. "This was an unexpected shift by the Illinois legislature and we are evaluating its impact on our hospitals and the patients we serve."
Lawmakers did pass a bill ensuring that Illinois hospitals get more than $250 million in additional annual funding, with a total of $3.8 billion in payments to hospitals for the life of the program.
"This funding will boost healthcare services in under-resourced communities across Illinois and ensure that our hospitals, which serve on the frontlines of the COVID-19 pandemic, have the resources they need to care for all Illinoisans," Gov. J.B. Pritzker said in a statement. "I look forward to signing this legislation when it reaches my desk.
"Government funding to fuel Chicago hospital merger falls through" originally appeared in Crain's Chicago Business.