NorthShore, Edward-Elmhurst hospital groups merger approved by regulators
Federal and state regulators have approved a merger by two suburban hospital groups creating the third-largest medical system in the state.
Officials from NorthShore University Health Systems and Edward-Elmhurst Health announced the merger approval by the Federal Trade Commission and the Illinois Health Facilities & Services Review Board today, saying the approval process went "smoothly" after nearly two years of planning by the two hospital groups.
"This is the result of a lot of hard work, especially over the last year," said NorthShore President and CEO J.P. Gallagher. "During the pandemic, I think the industry has seen significant challenges and we've also seen how important having a vibrant community network of care is."
Gallagher noted that none of the oversight agencies requested any additional information from the hospital groups during the approval process, a sign, he said, that indicated how well the two health care systems had prepared.
Gallagher will serve as the new system's president and CEO, while Mary Lou Mastro, current Edward-Elmhurst CEO, will become head of the new system's south region.
The new health system will initially be known as NorthShore-Edward-Elmhurst Health, but the new system's board of directors are expected ultimately to create a "new name and brand for the combined entity."
The merger will combine nine mostly suburban hospitals under one corporate umbrella, six from NorthShore and three from Edward-Elmhurst.
NorthShore operates Northwest Community Hospital in Arlington Heights, Glenbrook Hospital in Glenview, Evanston Hospital, Highland Park Hospital, Skokie Hospital and Swedish Hospital in Chicago. Edward-Elmhurst runs Edward Hospital and Linden Oaks Behavioral Health in Naperville as well as Elmhurst Hospital. The nine hospitals account for nearly 2,400 hospital beds in the suburbs and the north side of Chicago.
Additionally, the merger will create a network of more than 300 clinics and other sites of care throughout the suburbs and parts of Chicago, uniting 25,000 employees and producing the second-largest physician network in Illinois, officials said. Combined, the new system will be home to more than 6,000 doctors.
The new not-for-profit medical group is expected to exceed $5 billion in revenue during its first year.
In recent years, opponents of health care system mergers have argued such unions drive up patient costs by reducing competition in the marketplace.
"Our experience when we merged Edward Hospital and Elmhurst Hospital years ago was there were many opportunities to reduce costs," Mastro said. "And our cost of care to patients has decreased for our patients over the years."
Mastro said costs may rise, but that's an industrywide issue because of supply expenses. She argued those prices would be higher without the merger because of the economy of scale would be lessened.
"I am incredibly optimistic that as we bring together two outstanding, award-winning organizations, our future is unlimited and we will be successful," she said.
The two hospital groups had also pledged to invest $100 million each into a "community investment fund" in an effort to increase access and health equity throughout their service area.
Gallagher said the first round of grants from that fund are expected to be announced for seven recipients in the northern region of the new system in the coming days.