State panel rejects Mercy's plan to build Crystal Lake hospital

But Mercy officials aren't ready to quit

  • On Tuesday, a state panel refused to let Mercy Health System build this proposed 70-bed hospital in Crystal Lake.

    On Tuesday, a state panel refused to let Mercy Health System build this proposed 70-bed hospital in Crystal Lake. Courtesy of Mercy Health System

Updated 9/12/2012 5:16 AM

Although a state panel rejected Mercy Health System's plan to build a hospital in Crystal Lake, Mercy officials are not yet ready to throw in the towel.

By a 6-3 vote Tuesday morning, the Illinois Heath Facilities and Services Review Board said it would not issue a certificate of need to Wisconsin-based Mercy, which would have let it build a $115 million, 70-bed hospital on Three Oaks Road.


Tuesday's vote marks the second time the state board has rejected Mercy's plan to build a hospital.

But Rich Gruber, Mercy's vice president of community advocacy, says his agency isn't even close to giving up.

"Never say never," Gruber said.

That's because Tuesday's vote also corrected the record, a move Gruber says gives the plan fresh legs.

Earlier this year, an administrative law judge ruled that a clerical error on the plans, which directed some of Mercy's paperwork to Centegra Health System's plan for a 128-bed hospital in Huntley and vice versa, meant the board had to reconsider both projects.

This came after Centegra and Mercy appealed their rejections to the administrative law judge.

The next step is for Mercy to send its plan to the judge, based on the corrected record. The judge then would close Mercy's previous appeal, make a recommendation on the plan and submit it to the state panel for a fourth vote, hopefully by the end of this year, Gruber said.

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"We made a promise to the residents of the Crystal Lake area that we would do our darnedest to bring quality health care close to home and we don't back away from that easily," Gruber said.

In June of 2011, the board turned down Mercy's original plan to build a 128-bed hospital on the same spot.

In response to that denial, Mercy officials devised a plan for a 70-bed hospital.

But officials from other area health systems, including Sherman Hospital in Elgin, Advocate Good Shepherd Hospital near Lake Barrington and St. Alexius Medical Center in Hoffman Estates, argued that Mercy's plans for a smaller hospital still were unnecessary and that its lower bed number didn't meet state standards. They said a smaller hospital would still compete with them for patients and staff and also commissioned a study to prove no new hospitals were needed in McHenry County.

Tuesday, the group applauded the board's denial.

"The board's action supports our contention that this project would duplicate health care services that already exist for residents of northern Kane County and southeastern McHenry County," Rick Floyd, president and CEO of Sherman Health, said in a statement.


The state panel last rejected Mercy's plan in December. But the clerical mistake put Mercy's and Centegra's plan to another vote.

In July, the state panel approved Centegra's plan for a Huntley hospital by a 6-3 vote.

Susan Milford, Centegra's senior vice president of strategic planning, called Tuesday's vote against Mercy "sensible."

"We are pleased, and believe it is very sensible, that the Illinois Health Facilities and Services Review Board agreed that Crystal Lake is not the best location for a new hospital in McHenry County," Milford said in a prepared statement. "The board vote today affirms that Centegra planned appropriately to meet the growing demands of health care in southern McHenry County and northern Kane County."

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