North Shore, Advocate plan major merger

by CYRYL JAKUBOWSKI

Downers Grove-based Advocate Health Care and Evanston-based North Shore University Health System have announced plans to create the largest health care system in the state in a financial merger that could be completed by next year.

The $6.8 billion system would feature 16 hospitals in nine Illinois counties with 45,000 employees and with 3 million patients each year. The system would be the 11th largest nonprofit health care system in the nation.

The system would feature 6,000 physicians and would provide the largest network for academic training, according to a news release provided by the two health systems. The combined systems would feature integrated health care delivery systems, more than 350 sites for care and nearly $1 billion in charitable care and services.

The boards of directors for Advocate and North Shore signed an affiliation agreement on Sept. 11. The agreement is subject to approval by the Federal Trade Commission, the State of Illinois and by United Church of Christ.

"We have great respect for the North Shore organization," Advocate chief executive officer Jim Skogsberg said. "We see the world through the same lens — providing exceptional patient care by delivering better health outcomes at a lower cost. In addition to an outstanding leadership team, medical group and strong reputation for quality, North Shore is a pioneer in developing a tightly integrated system — advancing alignment with physicians and hospitals."

The two systems will continue to operate under their respective names and logos because they have a history of service in their communities, Skogsberg said.

"This agreement bring together the best of our two health systems: quality, safety and clinical integration supported by translational research and technology advancements," North Shore chief executive officer Mark Neaman said. "Advocate leads the way in their proven approach to population health. By joining together, we will raise the bar regionally and nationally for a new mode of health care delivery."

Neaman with Skogsberg will serve as co-chief executive officers of the new system for an initial period. The agreement will consolidate balance sheets, and a single board of directors will be made up of an equal number of members from Advocate and North Shore.

Neither system has agreed to assume any liability for the other’s debts as part of the transaction, but the parties would evaluate whether refinancing all or a portion of the existing debt could be beneficial, according to a notice of proposed affiliation from Advocate Health Care.

If the deal is signed and approved by the regulatory bodies, Advocate would be renamed to become Advocate North Shore Health Partners and become the sole corporate member for North Shore, Advocate Health and Hospitals Corporation, and Advocate’s other corporate subsidiaries, according to the notice.

Advocate operates 11 acute hospitals and a children’s hospital, and more than 250 sites that offer inpatient and outpatient services, home health services, hospice, counseling, physician services and health care education. Last year the system had 165,524 inpatient admissions and nearly 5 million outpatient visits. It features more than 35,000 employee s and 6,300 affiliated physicians, according to a press release.

Advocate operates the Illinois Masonic Hospital, 836 W. Wellington Ave., Trinity Hospital, 2320 E. 93rd St., and Lutheran General Hospital, 1775 W. Dempster St., Park Ridge, as well as hospitals in Downers Grove, Normal, Oak Lawn, Libertyville, Eureka, Barrington, Elgin and Hazel Crest.

The 645-bed hospital in Park Ridge opened in 1959 as a 326-bed facility, but the hospital’s roots date back to 1897, when the Norwegian Lutheran Deaconess Society of Chicago transformed a rented brick two-flat at Artesian Avenue and LeMoyne Street into Norwegian Lutheran Deaconess Hospital to serve immigrants in the Humboldt Park area.

In 1995 Lutheran General Health Systems and EHS Health Care combined to form Advocate Health Care, which is the largest health care system in the Chicago area. The organization is related to both the Evangelical Lutheran Church and the United Church of Christ.

Lutheran General opened a 192-room, eight-story patient tower on July 18, 2009. The site features facilities for intensive care, oncology, neurology/stroke and surgical, pediatric and obstetric patients.

North Shore operates four hospitals, Evanston, Glenbrook, Highland Park and Skokie. Last year, the system had 38,395 inpatient admissions and more than a million outpatient admissions. It has more than 10,000 employees and 2,100 affiliated physicians.

The announced of the proposed merger follows the recent announcement that Our Lady of the Resurrection Medical Center, 5645 W. Addison St., has been 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.

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.

Presence announced that it was selling the hospital in March, citing years of operating losses and anticipated financial shortfalls this year. The announcement of the sale came after months of speculation that the hospital might close or move away from providing inpatient care because of industry trends.

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.