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$1 Billion South Side Hospital Consolidation Dead After Legislature Fails To Approve Funding

The lack of funding will likely force hospital closures and further service cuts, hospital officials said in an open letter.

Mercy Hospital is one of four hospitals that would have combined under a $1.1 billion merger proposal that failed in May.
Mauricio Peña/ Block Club Chicago
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SOUTH SHORE — Four struggling South Side hospitals that had tentatively agreed to combine into one health care system are abandoning their billion-dollar plan after hospital officials say state legislators failed to approve crucial funding.

Advocate Trinity Hospital, Mercy Hospital and Medical Center, South Shore Hospital and St. Bernard Hospital would have consolidated, replacing their existing facilities with one or two new “destination hospitals” and three to six community health centers.

Hospital officials asked for a total of $520 million over five years from the state. That support would have funded a significant portion of the $1.1 billion plan, which also would have finances through existing assets, private philanthropy and future operating revenue.

On Friday, the Illinois Legislature passed SB 2541, which creates a “hospital and health care transformation program” for communities with “significant health care disparities.”

At least $263 million will be set aside for the program in Fiscal Years 2019 and 2020, with at least $150 million annually from Fiscal Years 2021 to 2023.

But an “11th-hour shift” left the South Side consolidation project out of the legislation, hospital officials said.

“In this moment, with so many things in flux with our state budget, it was nearly impossible for the General Assembly to go forward with a billion-dollar program,” Gov. JB Pritzker said at an unrelated press conference Wednesday. “I know that timing makes it very, very difficult for those hospitals.”

The lack of funding likely will force hospitals to close or cut more services, officials said in an open letter to Theresa Eagleson, director of the state’s Department of Healthcare and Family Services.

The four hospitals — at least two of which have nearly shut down in recent years — annually lose an estimated $76 million combined.

“We expected that our project was going to be identified in the Hospital Transformation legislation,” the letter reads. “You can imagine our profound disappointment that our project is not identified in the final form of the legislation. … It is clear to our coalition that we can no longer realize the bold vision we outlined for a new future on the South Side.”

At a virtual town hall last month, officials said the coronavirus pandemic and its disproportionate impact on Black Chicagoans highlighted the South Side’s need for a merger to improve health care access.

Pritzker said myriad factors are making it difficult for hospitals to operate during the pandemic, which has forced some facilities to drastically cut or reorganize services. St. Bernard, for instance, suspended its obstetrics unit last month to make more room to treat coronavirus patients. The hospital is working with Mercy to treat delivering mothers.

“These things are cross-currents occurring with a budget that’s been very, very difficult,” Pritzker said. “This is a situation none of us wanted to be in. I’m hoping we’ll be able to get to hospital transformation with the assistance” of the feds. “We want to get back to transforming health care across the state so everybody gets it and we have enough facilities.”

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