Edward, Elmhurst health systems announce plans to merge

Updated 1/22/2013 3:57 PM
  • Naperville-based Edward Hospital & Health Services plans to merge by midyear with Elmhurst Memorial Healthcare.

    Naperville-based Edward Hospital & Health Services plans to merge by midyear with Elmhurst Memorial Healthcare. Courtesy Edward Hospital

  • Edward Hospital CEO Pam Davis

    Edward Hospital CEO Pam Davis

  • Elmhurst Hospital CEO Peter Daniels

    Elmhurst Hospital CEO Peter Daniels

  • Elmhurst Memorial Hospital at Roosevelt and York Road.

      Elmhurst Memorial Hospital at Roosevelt and York Road. Daniel white | Staff Photographer

Naperville-based Edward Hospital & Health Services and Elmhurst Memorial Healthcare plan to merge by midyear with Edward CEO Pam Davis set to lead the newly combined hospital network with a potential $1 billion in revenue.

Any possible workforce changes, renaming or re-branding of the new hospital system, or changes in other top executives are yet to be determined, spokesmen at each hospital said.

Edward has about 4,700 employees and 1,000 physicians, while Elmhurst Memorial has about 2,900 employees and 680 physicians. The final total may be about 7,600 employees and 1,680 physicians, the hospitals said.

Elmhurst Memorial, founded in 1926, and Edward, a former tuberculosis sanitarium converted into a hospital in 1955, each said their boards met last week to sign a letter of intent to merge.

The hospitals now face a review process and certain aspects of the proposed merger are subject to state and federal regulatory review. Once approved, the merger could be completed by midyear, the hospitals said in a joint statement.

No cash changes hands, so there's no value to attribute to the merger deal between not-for-profit entities, Davis said.

The Edward-Elmhurst merger is among a number of such transactions in the suburban health care industry. Others include Cadence Health formed in March 2011 after the merger of Delnor Health System in Geneva and Central DuPage Health System in Winfield. And Provena Health and Resurrection Health Care merged into Presence Health Care.

It's all part of what hospitals see as their best options for their physicians and the communities they serve, said Danny Chun, spokesman for Naperville-based Illinois Hospital Association.

"Hospitals in Illinois and nationwide are all looking at their options and trying to face the transformation and changes in health care, which are expected to accelerate," Chun said.

Naperville Mayor George Pradel said the merger makes good business sense and would "only enhance our health care industries" in both communities.

"They're two top-quality hospitals, and I think it's going to increase the availability of health care in both cities," Pradel said. "It's something that's really happening throughout the nation. People are combining efforts in order to reduce expenses and try to make better use of their resources. I think this is the wave of the future."

Pradel said he recently toured Elmhurst Memorial's "gorgeous" new location at York and Roosevelt roads, though he hasn't lost his hometown pride for Edward.

"It (the merger) won't take away from Naperville (Edward) because Naperville is head and shoulders above all hospitals in the area," he said. "I don't think it will hurt us at all. It will add to our economic development and also strengthen the two hospitals in the future."

Elmhurst acting Mayor Scott Levin said news of the proposed merger came as a surprise, and city officials "will be following it with a great deal of interest."

"Elmhurst Memorial is a very important part of our community," he said. "I hope it will work out well for them. It could be a very positive thing."

The Edward-Elmhurst merger also is expected to include Illinois Health Partners, Edward's partnership with DuPage Medical Group and many independent physicians, to jointly manage the care of nearly 100,000 HMO patients in the region. DuPage Medical Group has more than 370 physicians, including a strong presence in the communities also served by Elmhurst Memorial and Edward, the joint statement said.

Pam Davis said in a statement that she wants to reassure local residents and patients that board members intend to "preserve both Edward and Elmhurst Memorial as vital health care resources for years to come."

"The delivery of health care is changing rapidly," Davis said. "Hospitals are under tremendous cost pressure while being asked to take a much more active role in managing the overall health of patients. Together, Edward and Elmhurst can enhance the quality and cost effectiveness of health care while still maintaining our strong local community focus."

The hospitals also issued a joint financial statement, saying that while Elmhurst has "debt because of a new facility, they are generating positive cash flow and have a significant amount of days cash on hand."

The statement also said Edward was in a "very strong financial position."

Peter Daniels, president & CEO of Elmhurst Memorial, said in a statement that the health care systems are a good fit "because of our similar patient-centered and physician-driven cultures, our wide range of services, our shared commitment to providing high quality care, and our complementary service areas. We'll be big enough to offer a wide variety of locations and the latest services across a wide geography, and nimble enough to provide for, and react to, the local needs of our communities."

Whether Daniels will remain with the system isn't clear.

"Peter Daniels has played a key role in these merger discussions and continues to play a critical role at Elmhurst Memorial Hospital," said Elmhurst spokeswoman Sheri Scott.

• Daily Herald Staff Writer Josh Stockinger contributed to this report.

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