Presense seeking to sell OLR Hospitol
by MARIO LEKOVIC
Presence Health has decided to sell Our Lady of the Resurrection Medical Center, 5645 W. Addison St., citing years of operating losses and anticipated financial shortfalls this year.
The announcement comes after months of speculation that the center might close or move away from providing inpatient care.
"After an extensive review of more than a year, we’ve determined that the best approach to continue operating Presence Our Lady of the Resurrection as a full-service community hospital while also retaining the committed employees and physicians who work there is to find a buyer willing to provide the necessary investments and resources," Presence Health president and chief executive officer Sandra Bruce said.
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 is anticipated this year.
"After an intense review of all of the options, it is clear that the financial realities do not support Presence Health’s ability to continue operating Presence Our Lady of the Resurrection as an acute-care hospital," Presence spokeswoman Tabrina Davis said. "Leadership has spent nearly a year working to evaluate a number of scenarios in an attempt to find a financially viable way to continue operating Presence OLR as a full-service community hospital. The Presence Health Board has determined the best approach for Presence Our Lady of the Resurrection to continue to provide acute care-services and retain jobs is to find a buyer."
The Presence Health system is made up of 12 Catholic hospitals and 27 long-term care and senior living facilities. The other Presence hospitals in Chicago are Resurrection Medical Center, 7435 W. Talcott Ave., Saint Joseph Hospital, and two Saints Mary and Elizabeth Medical Center campuses.
The system also operates Saint Frances Hospital in Evanston, Holy Family Medical Center in Des Plaines, Mercy Medical Center in Aurora, Saint Joseph Hospital in Elgin, Saint Joseph Medical Center in Joliet, Saint Mary Hospital in Kankakee, United Samaritans Medical Center in Danville and Covenant Medical Center in Urbana.
Presence officials said the losses are driven by industry changes as the delivery of health care become less hospital-centric and more community-based and focused on preventing and managing chronic health conditions.
According to a study of seven Illinois counties by Health Affairs, a peer-reviewed journal on health policy, inpatient utilization in the studied counties declined by approximately 47,000 discharges, from approximately 1,017,000 discharges in 2010 to 970,000 discharges in 2012. Inpatient utilization in the U.S. has been declining during most of the last decade.
Inpatient utilization rates per 1,000 declined across all age groups, averaging a 5 percent drop. Utilization declines in the adult population ranged from 5 percent for 45- to 64-year-olds to a much larger 8 to 9 percent for those age 65 and older, according to the study.
Davis said that Presence would prefer to sell to another Catholic or nonprofit health system but that it will "evaluate prospective buyers based on many criteria designed to identify a buyer who will best serve the needs of the community, including a commitment to keeping the hospital as a general acute-care facility, retaining employees and investing in the communities we serve."
Presence Health issued a request for proposals with the goal of having a letter of intent for the sale of the facility signed by early summer and a closing transaction by the end of the year. The transaction would need approval by the Presence Health Board of Directors and regulatory agencies.
Alderman Timothy Cullerton (38th), whose ward contains Our Lady of the Resurrection, said Presence Health did not approach him about its financial problems. "We told them we want to help," Cullerton said. "We want them to stay open."