Rush merging with Little Company of Mary as consolidation heats up – Health Care News

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4 October 2017 | 3:00 pm

Little Company of Mary Hospital & Health Care Centers has signed a letter of intent to join Rush, the Chicago-based academic hub that’s been looking to bulk up.

The deal, which must be approved by state regulators, marks Rush’s expansion to the south suburbs and Little Company’s exit as an independent hospital, shrinking the number of stand-alone hospitals in the region even more.

Little Company is a small, longtime Catholic staple that’s been searching for a partner. The hospital will remain Catholic, while Rush’s three other hospitals will remain secular.

Rush, a three-hospital network that includes flagship Rush University Medical Center on the Near West Side, two west suburban hospitals and a medical university, has been looking to woo partners. Earlier this year, the system rebranded itself as Rush to officially operate as one academic health system.

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Little Company had $210.1 million in total revenue for the fiscal year that ended June 30, according to an audited financial statement. The Rush system had nearly 11 times more, with $2.3 billion in the same fiscal year, an unaudited financial statement shows.

MOREALLIANCES

Consolidation has been heating up in the Chicago area as hospitals and health systems look to expand their reach for a host of reasons.

For one, insurers are paying hospitals to focus on prevention instead of for each service they provide, which can lead to unnecessary care and rack up the bills. But that’s time-consuming and expensive to do, often requiring the resources of a bigger health system.

Here’s another reason: More patients these days have health insurance plans with sizable deductibles they must pay before insurers start to cover a portion of their medical bills. Many of these patients are skipping out on their bills, causing debt to pile up at hospitals. That’s prompted hospitals, including Advocate Health Care and Edward-Elmhurst Health, to announce big cuts to rein in spending.

EVERYTHING ON THE TABLE

Little Company put out a formal call for proposals in late 2016. Everything was on the table, from a merger to a looser affiliation. At the time, a hospital spokeswoman told Crain’s that Little Company was searching for a partner in part because of a push industrywide toward outpatient care and a need to work more closely with physicians to focus on prevention.

The hospital, which has a strong partnership with another academic system, UChicago Medicine, is just 2 miles east of much larger Advocate Christ Medical Center along busy 95th Street.

For Rush, Little Company not only would extend the Rush brand to a new region. The deal also would provide a steady referral stream of patients who can stay close to home for routine care, but head downtown to Rush University Medical Center when they need more specialized treatment.

“Little Company of Mary Hospital is a great organization with deep roots in the community and would be a strong partner as Rush continues to expand the system’s reach throughout the Chicago area,” Michael Dandorph, president of the Rush system and of Rush University Medical Center, said in a statement. “This potential partnership is very important to our overall plans to make clinical, research and educational resources more accessible to our patients and our physician partners.”

Added Sister Sharon Ann Walsh, American Province Leader of the Little Company of Mary Sisters and chairwoman of the Little Company hospital board of directors: “Our sisters have been involved in a long and thoughtful discernment process, and we feel confident that aligning with Rush would allow us to continue to serve our community, as we have for nearly 90 years. We have a longstanding bond with our community because of the unwavering commitment of our dedicated physicians, other medical professionals and the devotion of our employees. We look forward to the potential of a stronger future with Rush and the expanded capabilities that we would be able to offer our patients.”

‘A GOOD FIT’

In an interview, Dennis Reilly, Little Company president and CEO, said the hospital spent about a year visiting other health systems and inviting them to Evergreen Park to learn more about them.

“It became very clear to us as time went on that Rush was really a very good fit for a lot of reasons,” Reilly said.

Here are a few: remaining Catholic was a top priority for Little Company. Rush not only respected that wish, but has experience having a hospital in its network that is Catholic while others are not. Rush Oak Park was Catholic until a few years ago.

Little Company also liked that Rush University, a training ground for doctors, nurses and other medical professionals, would provide a pipeline of future talent for the hospital. During interviews with prospective physicians, for example, Reilly said the doctors would ask about Little company’s future and gravitated toward larger health systems.

“As a stand-alone community hospital, it was becoming increasingly difficult for us to be able to recruit and retain top talent,” Reilly said. “People like the idea that your hospital is connected with a larger system.”

Rush has about 2,000 physicians across the system. Little Company has about 200. Rush also plans to get Little Company on a shared digital medical records system, considered a must-have these days to keep close tabs on patients in an era where prevention and coordinating care among doctors are key.

“Our number one goal here is to expand access to the patients, to help increase the capabilities within Little Company,” added Rush’s Dandorph in an interview.

Nothing will change immediately with Little Company’s collaborations with other health systems. Reilly will remain at the helm of Little Company, and a hospital board member will sit on the Rush system board. The letter is another sign of Rush’s respect, Reilly said.

The deal is expected to be finalized in 2018.



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