CDH, Delnor hope everybody wins in merger

About two years ago, Delnor Hospital officials began exploring ways to respond to unprecedented change in the health care industry.

Eventually, the Geneva-based hospital concluded it would be in a better position to meet patients' future needs if it joined forces with another organization.

Enter Central DuPage Health. The parent company of Central DuPage Hospital in Winfield was approached earlier this year with the idea of merging with Delnor Health System “to create a single, integrated health system.”

“Both of us together saw a bigger vision about how we could do good things for our communities,” Central DuPage CEO Luke McGuinness said. “We're obviously in contiguous communities. Scale matters in this business. I believe we both saw that we could improve the quality and, hopefully, get more efficient if we did things together.”

After signing a “definitive” agreement Dec. 17 to merge, both organizations are now seeking approval from several governmental agencies, including the Illinois Health Facilities and Services Review Board. Hospital officials hope the regulatory review process can be completed in the spring.

In separate interviews with the Daily Herald, McGuinness and Thomas L. Wright, president and CEO of Delnor, said the proposed merger would create a new health system capable of generating about $1 billion in annual revenue. At the same time, the goal is to provide better and cheaper service in the West suburbs.

“The real focus in health care today is value — value defined as high quality with lower cost,” Wright said. “I think collaboratively we could really knock the socks off that equation to have the best value for our community.”

In addition to its 313-bed hospital in Winfield, Central DuPage Health operates convenient care centers; occupational health services; home and hospice care, and its CDH Cancer Center in Warrenville. It also partnered to open a new proton therapy cancer treatment center in Warrenville.

Delnor is a 159-bed hospital, and Delnor Health System's services include a health and wellness center, Delnor Glen Senior Living and the LivingWell Cancer Resource Center.

Delnor is no stranger to mergers. It was formed in 1986 when Delnor Hospital of St. Charles combined with Community Hospital of Geneva. The Delnor campus along Randall Road opened in 1991.

“We believe they made a bold move when they bought that tract of land and went out to Randall Road,” McGuinness said. “We think they're big winners. We think it (the proposed merger) is like putting two winners together. So we are excited to become their merger partner.”

The new health system, which has not yet been named, would be governed by a 20-member board of directors with equal representation from Delnor's and CDH's existing boards. McGuinness would become CEO of the new health system. Wright would serve as both president of Delnor and executive vice president of the new health system.

While Delnor and CDH patients' access to physicians won't change, officials said, the new health system will give those patients “increased access to a broader range of clinical services.”

“We're elevating the depth of our quality initiatives,” Wright said.

McGuinness said the proposed health system will save money on group purchases of supplies and equipment.

“If you combine their group purchasing efforts with ours, we're in a different tier,” he said. “You are eligible for bigger discounts.

There are also economies of scale for buying malpractice insurance, he added, and ways of consolidating some office operations.

“We haven't made any decisions,” McGuinness said. “But it's natural to explore them where you would have one billing department, one finance department, things like that.”

Wright said being “more clinically effective” is another way to reduce costs. “Doing things right the first time — and not having a repeat procedure — can lower the cost,” he said.

The merger wouldn't change the fact that Delnor doesn't perform open-heart surgeries. The state hospital planning board in 2008 rejected Delnor's plan to start an open-heart surgery program.

McGuinness said Delnor has been sending most of its open-heart surgery patients to CDH. That would continue.

When asked if the merger would result in layoffs, Wright said it's “too early to tell” how staffing would be impacted. CDH has about 4,000 full- and part-time employees at all its locations. About 1,800 full- and part-time employees work for Delnor.

McGuinness said the hope is the new health system could end up hiring more people.

“This is really a story about growth,” McGuinness said. “Even though there's very little growth in terms of population left in Wheaton and Glen Ellyn, there's a lot growth to the west. We hope to be so attractive that more and more people come to us and we actually create more jobs.”

Merger: Official says it's too early to tell how staffing would be impacted