2 McHenry County hospital plans nixed

A state regulatory panel has decided McHenry County doesn’t need either of two new competing hospitals.

Mercy Health System’s plan to build a $199 million, 128-bed hospital in Crystal Lake was denied Tuesday by the Illinois Health Facilities and Services Review Board.

The panel then rejected Centegra Health System’s request to construct a $233 million, 128-bed facility in Huntley.

But Mercy and Centegra officials said they aren’t yet giving up on their certificate of need applications. Both health systems are planning to appeal later to the review board after gathering additional information to justify their projects.

Rich Gruber, vice president of Mercy Health System, said Mercy officials are going to analyze the state findings before deciding how and when to come back to the board. On Tuesday, the panel voted 8-1 to deny the plan for Mercy Crystal Lake Hospital and Medical Center at Route 31 and Three Oaks Road.

When asked why Mercy would appeal after having eight review board members vote against its project, Gruber said there is need for area residents to have better access to health care.

“I am a believer that our project provides that access that doesn’t currently exist,” Gruber said. “They (residents) have waited a lot of years for good access to health care. I don’t think they deserve to wait much longer. We’ll give it our best shot.”

Meanwhile, Centegra representatives argued that they’re trying to serve new growth in McHenry and northern Kane counties with a proposed hospital at Reed and Haligus roads in Huntley. So they said they were “a little surprised” when the review board voted 8-1 against the plan.

“We worked off the population growth that we see in that market,” said Michael Eesley, CEO of Centegra Health System. “And with that population growth, we think it will have minimal impact on any competing organizations.”

But three suburban hospitals — Sherman in Elgin, Advocate Good Shepherd near Lake Barrington and St. Alexius in Hoffman Estates — say the population growth projections in Mercy’s and Centegra’s applications are based on “significant overestimates” of population.

Karen Lambert, president of Advocate Good Shepard Hospital, said the area already has enough hospitals. New hospitals would create an unnecessary duplication of services, she said.

“Within any given area, there’s only so many babies to deliver or so many surgical procedures to perform,” Lambert said. “A new hospital will not create new demand.”

Mercy representatives responded by saying their proposed hospital would be in a densely populated area providing medical care to Crystal Lake’s growing diverse and elderly population.

“These other hospitals got up here and talked out of pure vested interest,” said Javon Bea, Mercy’s president and CEO. “They would rather have people — low-income and elderly — fight their way 14 miles, 28 minutes to get access to an emergency room so that they can ... not have to work on providing excellence of care.”

Still, Illinois Department of Public Health staff reviewers recently said both Mercy’s and Centegra’s hospital proposals would provide more beds than needed in the area. That report concluded the area will need 83 more surgical beds — 17 fewer than what’s called for in each hospital plan.

Dr. James Burden, one of the review board members, said he voted against both proposals because he’s concerned about the low occupancy rates at competing institutions. “We should have a stronger base in the area to allow for a brand-new institution to appear,” Burden said.

In the meantime, opponents of Mercy’s and Centegra’s hospital plans say the proposals could be back on the review board agenda as early as Aug. 16.

“We know the board will consider these projects again,” Lambert said in a statement, “and are confident that members will see that residents of northern Kane County and southeastern McHenry County are already well served by Good Shepherd and several other regional medical centers.”