Illinois health regulators block Mercy hospital closure

Illinois health regulators denied a Chicago hospital’s bid to close its doors due to increased costs and lower utilization. All six board members present at Tuesday’s meeting voted against closure. 

The plans to end services at Mercy Hospital and Medical Center on Chicago’s South Side drew outcry from the community as the facility serves some of the city’s most vulnerable residents as a safety net provider. The closure plans were also ill received as it coincided with the COVID-19 pandemic, which has been particularly deadly for people of color.

Mercy officials said they were disappointed with Tuesday’s outcome.

“We will look forward to going before the Board again in early 2021 with our plans to discontinue inpatient services at Mercy Hospital and transition to an outpatient model to serve residents on the south side of Chicago,” the hospital said in a statement.

The hospital, which is part of the large nonprofit system Trinity Health, submitted plans to discontinue inpatient operations in late August after plans fell through to band together with three other south Chicago hospitals to create a new system.

But ending those services will result in a need for intensive care beds, and the loss of emergency services “will result in health risk to the population that Mercy Hospital serves,” the staff for the Illinois Health Facilities and Services Review Board found.

Illinois is a state with a certificate of need program, which requires healthcare facilities to prove there is a need for a certain healthcare service in a defined region in order to gain approval from a state board. In some instances even discontinuation or closure must be approved, which is the case here.

By its own calculation, the board found that the city has an excess of certain types of beds, including obstetric and medical surgical beds among the city’s 28 acute care hospitals. However, the formula to calculate need, shows there is a need for 36 intensive care beds in the city. 

Mercy executives argued Tuesday that they’ve done all they could to maintain inpatient services. But, after exhausting their options, they concluded the hospital must move to an outpatient model.

Others, though, have questioned why Mercy needs to close if it was able to post a profit in fiscal year 2020.

“Various parties have asserted that Mercy Hospital is viable and that closure and transformation is not necessary because Mercy Hospital posted a $4.1 million profit in fiscal year 2020,” John Capasso, executive vice president of Trinity Health, said in testimony Tuesday, according to a transcript.

But that is simply due to one-time payments from both the state and federal government, and if those were removed Mercy would have posted a $38.9 million loss for 2020, he said in his testimony. “In other words, the annual operating losses at Mercy Hospital have been staggering,” he said.

Earlier options that fell through included Mercy’s bid to create a new system with the other south Chicago hospitals. 

The plan called for investing $1.1 billion in the area to build a new hospital and community centers to improve access to care in order to narrow the gap in health disparities. In Chicago, the life expectancy of residents on the city’s North Side is 30 years longer compared to those who live on the South Side, according to a study from NYU School of Medicine.

The new system, which included Advocate Trinity Hospital, South Shore Hospital and St. Bernard Hospital, hoped to combat some of these issues. But those plans were dashed when an “eleventh-hour shift in the legislation” eliminated the funding they needed.

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