Elmhurst Memorial Healthcare and Edward Hospital and Health Services, based in Naperville, have signed a definitive agreement, which is a major step toward a merger, according to a statement from the two hospitals released today, Wednesday, April 3.
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The agreement keeps the merger on track to be completed this summer. It includes the terms and conditions of the new system and commits Edward and EMHC to becoming an integrated health system pending review by regulators during the next few months. The merger already has cleared a standard federal antitrust review by the Federal Trade Commission and the Antitrust Division of the Department of Justice. The Illinois Health Facilities and Services Review Board will review the merger in the coming months.
EMHC announced in January that the two groups were investigating the merger, which will create a three-hospital health system—Edward, Elmhurst Memorial and Linden Oaks at Edward. Combined, they have revenues of more than $1 billion and more than 50 locations across a service area of 1.7 million residents. The system would employ nearly 7,700 and have more than 1,680 physicians on staff.
Also in January, Fitch Ratings downgraded Elmhurst Memorial's financial rating from BBB+ to BBB. EMHC is holding nearly $500 million in debt due to its new 866,000-square-foot, state-of-the-art hospital facility, which opened in June 2011. The debt is secured by a pledge of gross revenue. Fitch will re-evaluate after the merger is complete, according to a information posted on Reuters.com in January.
EMHC also is constructing a $21 million cancer center.
According to information provided by EMHC Wednesday, leaders at both hospitals have begun working on transition plans for the new health system that, upon completion of the merger, will:
- improve coordination of care and quality in the region as Edward and Elmhurst Memorial medical staff share best practices and clinical protocols
- build upon relationships with affiliated and independent physicians. Edward Medical Group and Elmhurst Memorial’s affiliated practices, including Elmhurst Clinic LLC, will remain of key strategic importance as will hundreds of independent physicians at both entities, including DuPage Medical Group practitioners. Partnerships will continue with other major physician groups, such as Advocate Midwest Heart Specialists, which has a large presence at Elmhurst and Edward.
- improve access to clinical services. Edward and Elmhurst plan to complement and grow our service offerings and locations throughout the region.
- create opportunities for efficiency. With shrinking reimbursement for hospitals, healthcare reform demands that we become more efficient to lower healthcare costs.
Edward President and Chief Executive Officer Pam Davis is slated to be CEO of the new health system. Elmhurst Memorial CEO W. Peter Daniels resigned effective March 31.
Related:
- Elmhurst Memorial Healthcare, Edward Hospital and Health Services Announce Merger
- UPDATED: Elmhurst Memorial Healthcare's Financial Health in Question as its Rating is Downgraded Again
- It's Official: Elmhurst Memorial Hospital Property is Tax-exempt—Mostly
- Elmhurst Memorial Healthcare CEO Daniels' Resignation Effective March 31