The deal fell apart in May after lawmakers approved revisions to the state’s hospital assessment program, but declined to make funding available for the project.
“The decision to discontinue services at Mercy Hospital was not an easy one,” Mercy President Carol Schneider said in an emailed statement. “But patients on the South Side have unmet needs within the current system. The transformation from an inpatient model to one with greater access to outpatient services will better address the disparate outcomes in health from which our community suffers today.”
Mercy will close between Feb. 1 and May 31, subject to approval from the state, the statement says. However, the hospital plans to build a new outpatient center that could treat over 50,000 patients annually, offering diagnostics, urgent care and care coordination to prevent emergency room visits and hospitalizations among residents.
Livonia, Mich.-based Trinity Health, which also owns three-hospital Loyola Medicine, is the fifth-largest not-for-profit hospital system by revenue nationwide. It has about $19 billion in revenue, 92 hospitals and hundreds of clinics across 22 states.
Since purchasing Mercy in 2012, Trinity has provided hundreds of millions of dollars to fund infrastructure improvements and meet operating needs, according to the statement. But Mercy’s “aging facility will require at least $100 million of additional capital investments in the next five years to maintain a safe and sustainable acute care environment,” the statement says, noting that “monthly operating losses of $4 million can no longer be sustained.”
Mercy had been operating in the red, with a 2018 net loss of $68.3 million, according to data compiled by Modern Healthcare. The hospital treats a large number of patients on Medicaid, which pays less than Medicare and commercial insurance.
COVID-19 did not play a role in the decision to close. But Mercy notes that patients in its service area disproportionately suffer from chronic conditions and that the pandemic has further highlighted such disparities.
“We can’t meet the community’s needs on our own,” Schneider told Crain’s in January, when the four South Side hospitals first went public with their plan to merge. “Our current state is not sustainable and the people in our communities truly deserve this transformative approach.”
Founded in 1852, Mercy was the city’s first chartered hospital and a haven during the Great Chicago Fire in 1871, according to the hospital’s website.
WBEZ first reported the closure.