The merger of four financially struggling Chicago South Side hospitals is off. The move comes after lawmakers approved revisions to the state's hospital assessment program, but left out a pool of about $500 million to help facilities across the state transform in an evolving industry. The South Side hospitals were banking on a significant piece of the pot.
"After carefully evaluating the eleventh-hour shift in the legislation establishing the Hospital Transformation Fund, we have determined that we see no path forward for our project that would transform health care on the South Side and help address disparities in health for the patients we serve," the hospitals said in a letter to Illinois Department of Healthcare & Family Services Director Theresa Eagleson. "We have grave concerns about this development, and we believe this action will force hospital closures, cause further service cuts, and push access to care even further out of reach for the families we serve."
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 health care 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,' " state Rep. Marcus Evans, D-Chicago, told Crain's last week.
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.
While a $150 million hospital transformation fund was established as part of S.B. 2541, which lawmakers passed last week, it's unclear when the funds will be made available and who will have access to them. Lawmakers said that work will continue after the legislative session.
The four hospitals had requested $110 million from the hospital transformation fund for fiscal year 2021, asking for a total of $520 million over the next five years to offset losses and create the new, single system, a source close to the deal said.
"While we cannot go forward, we have formulated a strategic business case for transformation that hopefully will not be lost—and could serve as a future resource for the state," the letter says. "Our South Side coalition will do our best to share this expertise and conclusions as the state considers whatever path it will take to address the unacceptable disparity that remains, and the precarious financial situation faced by hospitals in the region."