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Bronzeville, Near South Side

As New Owners Take Over Former Mercy Hospital, Activists Who Helped Save It Want To Know More About Deal With The City

Insight Hospital leaders are promising a $50 million investment in the first two years, reinstating the emergency department and having three community members appointed to the board in the next three months.

Hospital and city officials release butterflies to celebrate the opening of Insight Hospital and Medical Center Chicago in the Near South Side on June 4, 2021.
Colin Boyle/Block Club Chicago
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BRONZEVILLE — New owners took over the former Mercy Hospital this month, pledging to keep the facility open at least through the end of the decade and bring back medical services Near South Side neighborhoods haven’t had in years.

But how the owners were installed was shrouded in mystery, and the process included a new contract engineered by Mayor Lori Lightfoot’s administration. As the hospital welcomes back patients, activists who stopped it from closing say they were left out of those final talks and don’t know what commitments city and hospital leaders made to safeguard its long-term future.

Now members of the Chicago Health Equity Coalition are pushing to review the formal agreement between the city and Insight Chicago.

“We know what we’ve been told, but we don’t know what’s in” the contract, said Roderick Wilson, executive director of the Lugenia Burns Hope Center, which is part of the coalition. “We want to get the documents from the city so we know what’s real.”

Credit: Colin Boyle/Block Club Chicago
Insight Hospital and Medical Center Chicago in the Near South Side on June 4, 2021.

Insight Chicago bought the hospital, 2525 S. Michigan Ave., for $1 in April. The group took over operations June 1 and have renamed it Insight Hospital & Medical Center Chicago.

Hospital leaders and local officials gathered at the site Friday to mark a new chapter for the building, promising $50 million investment in the first two years, reinstating the emergency department and having three community members appointed to the board in the next three months.

Those details about what the new owners will do with the hospital are laid out in an addition to the sale agreement between Insight and former owners Trinity Health. Insight spokeswoman Anel Ruiz provided the document to Block Club, showing it was finalized May 28.

“You all here have entrusted us to your hospital and welcomed us into your community,” hospital CEO Atif Bawahab said. “Outside of our words, it’s now our obligation to now deliver with our actions. It really is our sincere intention to make this a vibrant hospital that you are all proud to be part of your community.”

The contract says Insight will create annual, publicly available capital budgets, maintain or increase charity care and restore it as a teaching hospital.

Insight founder Dr. Jawad Shah said the first part of rebuilding is setting up “the nuts and bolts of a fully functional hospital.”

“Emergency room … operating rooms, ICU, obstetrics, rehab, behavioral health — these are the basics of what are needed,” Shah said. “Once that’s done and we’re stable — not only clinically but we’re solvent financially — we’re now ready to grow.”

Several of those commitments align with demands organizers made earlier this year. Some of the coalition members met with city officials last week after the terms were finalized.

“It sounds good, but we don’t know until we see it,” Wilson said. “People have been trying to bring us in the loop now, but after the agreements have been made. We weren’t at the table when the final agreement was done. Now we’re trying to play catchup.” 

RELATED: With Mercy Hospital Sale Approved, Activists Demand Say In Leadership And Expanded Services

Credit: Colin Boyle/Block Club Chicago
Dr. Jawad Shah, founder of Insight Hospital and Medical Center Chicago, at the hospital’s opening event in the Near South Side on June 4, 2021.

Other lingering questions remain.

Trinity Health was required to keep Mercy a full-service hospital through 2029 based on a redevelopment agreement with the city and a tax increment financing district around the hospital. TIFs cull property taxes from within its boundaries for 23 years to support construction projects in those areas.

The 26th and King Drive TIF was set up in 2006 to drive public dollars toward Mercy, which at the time needed tens of millions of dollars in improvements.

The Chicago Health Equity Coalition raised alarms last month about what would happen to the TIF under a new owner.

Annual reports and city data show the Mercy TIF generated around $9 million in tax revenue 2006-2020. Another $9 million was projected between now and 2029, but WBEZ reports Insight will not have access to that money. The future of the TIF district itself is uncertain.

Either way, in filing for bankruptcy, the former leaders said the hospital accumulated more than $300 million in debt over the past several years. It would need at least $100 million in upgrades to bring the building up to par, so the $9 million is a drop in the bucket.

Credit: Colin Boyle/Block Club Chicago
Insight Hospital and Medical Center Chicago in the Near South Side on June 4, 2021.

“And now it’s 10 times worse, to be very honest,” Shah told Block Club last month. “Things have dissipated. Staff are gone. We’re coming into a situation where I believe we’re underwater.”

City officials have not commented further, but an Insight attorney told WBEZ the new terms with Insight give Lightfoot power to enforce the new agreement with Insight.

“Mercy Hospital is in dire circumstances,” Lightfoot said at an unrelated news conference last week. “And one thing that we know coming out of the pandemic is that it’s crucial that our safety-net hospitals are supported, that they remain open, that they provide services to people and communities most in need.

“If you let a hospital close, it doesn’t reopen. I have a responsibility as mayor to do the thing that I believe is in the best interest in the city. I think that we did the right thing under difficult circumstances, and keeping that hospital open was a key priority for me.”

Credit: Colin Boyle/Block Club Chicago
Atif Bawahab, CEO of Insight Hospital and Medical Center Chicago, speaks at the hospital’s opening event in the Near South Side on June 4, 2021.

Ald. Sophia King (4th), whose ward includes the hospital, raised alarms about City Hall’s role in hospital management. Typically, the state oversees hospitals — not a municipality — and King said Lightfoot overstepped her authority by canceling the old Mercy contract without City Council approval.

“I am very disturbed that the mayor is attempting to usurp our powers by terminating a redevelopment agreement (RDA) in order to ink a deal with the unvetted buyer (Insight) of Mercy hospital in my ward,” King wrote in emails to other aldermen. “… This sets a bad precedent for any legislation that we pass as a body.”

RELATED: New Mercy Hospital Owners Face ‘Deplorable’ Conditions And Mounting Debt. Can They Revive A Bronzeville Institution?

After years of financial troubles, Trinity attempted a $1 billion deal to merge Mercy with South Shore Hospital and St. Bernard Hospital last year. That fell apart in spring 2020 after state legislators failed to approve $520 million to support the plan. 

Trinity then announced it would close Mercy, setting off months of protests Downtown and on the hospital’s campus. Trinity filed for bankruptcy in February and began winding down services, including its emergency room, one of the busiest in the city.

Credit: Maxwell Evans/Block Club Chicago
Dr. Anudeep Dasaraju (in gray), a resident physician in Mercy Hospital’s emergency room, speaks out against the hospital’s planned closure outside the James R. Thompson Center.

But the Illinois Health Services and Review Board board rejected Trinity’s move to close Mercy, saying it would widen a health-care gap disproportionately affecting low-income Chicagoans in the middle of a pandemic. It’s the primary hospital serving several South Side neighborhoods, including Bronzeville and Chinatown.

State regulators also denied a bid to open an immediate care facility in Oakland, although the board has planned another hearing on that in July.

Trinity announced a tentative agreement in March to sell the hospital to Insight. State regulators approved the deal in March, clearing Insight to take over May 31.

Keeping Mercy open was critical for an area of the South Side that has had shaky access to medical services for decades.

UChicago’s trauma center closed in 1988. Michael Reese shut down its trauma division in 1991, in part because UChicago’s closure shifted an enormous burden of care and financial strain onto the facility. Michael Reese’s site is slated to be the home of a multi-billion-dollar development.

Those shutdowns left Advocate Christ Medical Center in suburban Oak Lawn as the only Level 1 trauma center close to the South Side for nearly three decades.

UChicago’s trauma center reopened in 2018 after years of fierce activism from students, advocates and community members. With South Side organizers having similar success again, they are eager to see the city’s oldest chartered hospital not only survive — but thrive.

“Without us, Mercy wouldn’t have stayed open,” Wilson said.

Credit: Colin Boyle/Block Club Chicago
The outline of old signage for Mercy Hospital is seen at Insight Hospital and Medical Center Chicago in the Near South Side on June 4, 2021.

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