OLR to stay open after Presence find buyer
by CYRYL JAKUBOWSKI
Our Lady of the Resurrection Medical Center, 5645 W. Addison St., is being sold to Community First Healthcare of Illinois after Presence Health signed a letter of intent with the newly formed benefit corporation to sell the financially struggling hospital, according to officials.
The hospital is part of Presence Health, the largest Catholic health system in the state, which was created in 2011 through the merger of Resurrection Health Care and Provena Health. Presence has 12 hospitals and 22,000 employees, 4,000 medical professionals and a revenue base of nearly $3 billion.
"They have met the criteria that we have set to best serve the health care needs of the community," Presence Health spokeswoman Angela Benander said. Benander would not disclose the financial details of the agreement until the deal is completed.
Community First Healthcare spokesman Ed Green said that the benefit corporation was formed in order to help hospitals like Our Lady of the Resurrection to continue to serve the community. Green said that benefit corporations operate like a mix of nonprofit and for-profit organizations. He said the corporation’s mission is not to maximize profits but also to make a commitment to benefit to the community.
Governor Pat Quinn signed the Benefit Corporation Act into law in 2012. The law provides that a corporation may elect to become a benefit corporation by amending its articles of incorporation. The corporation must have the purpose of creating a general public benefit, and it is required to file an annual report with the Secretary of State’s Office.
The New York-based Muneris Capital Group, which works to turn around hospitals experiencing financial difficulty, is financing the corporation, Green said.
"We have excellent senior executives who have experience, we have idea men, we have the finances from Muneris, and we are hoping that things will fall in line to do what’s right," Green said. "We are excited about this opportunity."
The investors have "resources to support a turnaround for the hospital that will enable it to continue to serve an important role in promoting the health of its community now and in the future. The Community First Healthcare local executive team has significant health care experience in the Chicago market," according to a Presence Health press release.
Green said that venture intends to make improvements to the hospital. "We are going to invest $20 million over 5 years into the facility itself," he said. "One idea that we have is to take the aging emergency room and take that ER and tweak it, modernize it."
"If you modernize that ER and put some resources in it, remodel it, now you have a facility that can take in more patients and that hopefully increases admission rates," Green said. "There is no silver bullet, and this will definitely take some time, but we like the communities around that hospital, how engaged people are, and we want that."
Presence announced that it was selling the hospital in March, citing years of operating losses and anticipated financial shortfalls this year. The announcement to sell came after months of speculation that the center might close or move away from providing inpatient care because of industry trends.
Our Lady of the Resurrection suffered an operating loss of $12.5 million in 2012. The loss was reduced to $9.8 million last year after cost-cutting measures, but an estimated $19 million loss was anticipated this year, officials said.
Presence also has signed a letter of intent with Glen Health and Home Management to sell the Presence Ballard Rehabilitation nursing facility, 9300 W. Ballard Road, Des Plaines, and the Presence Saint Andrew Life Center, 7000 N. Newark Ave., Niles, Benander said.
Benander said that the buyers agreed that they will strengthen the facilities and keep Our Lady of Resurrection an inpatient care facility, Ballard as a skilled nursing facility and Saint Andrew as a retirement and senior care facility.
"The bottom line is that they have signed a letter of intent and they can maintain their existing services, and the employees would be able to keep their sick time for their years of service," Alderman Timothy Cullerton (38th) said. "From the perspective of the community, I think that this is a good thing because before we were talking about closing the hospital. They might bring in new management staff or some job loss might happen because of attrition, but I think they are committed to keeping it the way it is."
Cullerton said that the hospital’s emergency room will remain open.
"We are pleased that Community First Healthcare and Glen Health and Home Management will continue to serve the respective acute care and senior care needs of these communities," Presence Health president and chief executive officer Sandra Bruce said. "Both organizations have expressed their desire to continue our commitment to serving the needs of these communities and are committed to retaining employees and maintaining existing charity care. As a Catholic health care system, these were all critical factors in our selection process."
Bill Brownlow, who will serve as the president of Community First Healthcare said that the leadership of the corporation has experience with transforming hospital operations and that organizing Community First as a benefit corporation will allow people to strike a balance between meeting the needs of the community and the financial strength of the medical center.
Green said that Brownlow has worked on projects in Joliet "that rely heavily on Medicaid and are in urban settings." He said that Our Lady of the Resurrection fits the organization’s model and that the corporation’s officers are confident that they can revive the hospital and implement community services.
"We are going to be working on the financial agreements by the end of the summer with the goal of closing on all transactions by the end of the year," Benander said.
The hospital opened as Northwest Hospital in 1955, and it changed its name to John F. Kennedy Medical Center in 1986. An intensive care unit opened in 1969, and the hospital was formed as a nonprofit institution in 1968.
The hospital became a part of Resurrection Health Care in 1988, and Chicago-based Resurrection Health Care and Mokena-based Provena Health merged in 2011.