Elmhurst Memorial Healthcare, Edward Hospital and Health Services Announce Merger

By Karen Chadra

Elmhurst Memorial Healthcare and Edward Hospital and Health Services on Tuesday announced plans to merge, creating one of the larger integrated health systems in the state.

Get news in your inbox. Sign up for the Patch newsletter.

Like Naperville Patch on Facebook.

According to a press release, the proposed merger would create a three-hospital health system—Edward, Elmhurst Memorial and Linden Oaks at Edward—with 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 7,600 and have more than 1,680 physicians on staff.

Last week, the parent boards of each entity agreed to enter into a letter of intent to merge. Before the merger can be finalized, Edward and Elmhurst Memorial will complete the normal due diligence review process in the coming months. Certain aspects of the proposed merger also are subject to state and federal regulatory review. Once approved, the merger could be completed in mid-2013. 

In October 2011, Elmhurst Memorial announced its intent to merge with Northwestern Memorial Healthcare. Those talks ultimately ended in June 2012 due to "bad timing," hospital officials said.

In this new merger, the letter of intent provides for Edward President and Chief Executive Officer Pam Davis to be named CEO of the new health system.

“With this transaction we can assure residents of our local communities that we will preserve both Edward and Elmhurst Memorial as vital healthcare resources for years to come,” Davis said in a prepared statement. “The delivery of healthcare is changing rapidly. 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 healthcare while still maintaining our strong local community focus.”

Elmhurst Memorial President and CEO Peter Daniels "has played a key role in these merger discussions and continues to play a critical role at Elmhurst," Sheri Scott, executive director of marketing and public relations at Elmhurst Memorial, told Patch Tuesday afternoon.

Scott also said it's "too early to discuss any staffing changes" or layoffs.

“Edward is a great fit with Elmhurst 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," Daniels said. "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.”

The merger would likely strengthen the financial position of EMHC, which is carrying hundreds of millions of dollars in debt due to the constrution of its new 866,000-square-foot hospital on Brush Hill Road, which opened in June 2011.

Also, Elmhurst and other hospitals' efforts to regain their tax-exampt status has been long-fought. But "recent decisions made by the Illinois General Assembly have meant that Elmhurst Memorial will continue to operate as a nonprofit, tax-exempt hospital," Scott said.

The merger will build upon the success of 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, according to the release. DuPage Medical Group has more than 370 physicians, including a strong presence in the communities also served by Elmhurst Memorial and Edward.

According to the statement, the merger also 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. The hospitals also plan to continue partnerships 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 each have a broad range of services they plan to complement and grow throughout the region.
• Become more efficient. With shrinking reimbursement for hospitals, healthcare reform demands more efficiency to lower healthcare costs.

"It is not currently anticipated that the financial structure of either organization ... will be altered by the proposed merger," according to the statement.

Elmhurst Memorial Hospital was founded in 1926. It was re-built and re-opened in 2011 on Brush Hill Road as a state-of-the-art acute care hospital, with 259 private patient rooms, a modern emergency department and technologically advanced surgical suites.

Edward Hospital in Naperville was founded in 1907 as a tuberculosis sanitorium. It was converted into a full-service hospital in 1955. It has 309 private patient rooms and 4,400 employees, including 1,350 nurses and a medical staff of 1,000 physicians comprised of independent members of the medical staff, employed physicians and independent contractors.

Edward Plainfield at 127th and Van Dyke continues to grow, and saw more than 100,000 patient visits last year. Edward was ranked No. 1 for overall quality in Chicago’s west and southwest suburbs, and No. 1 in all key service lines in the region according to a 2012 survey by the National Research Corporation. Edward was re-designated as a Magnet hospital for nursing excellence in 2010 after receiving its original designation in 2005. 

Linden Oaks at Edward is a 108-bed behavioral health hospital on Edward’s Naperville campus with outpatient locations in Naperville, Plainfield, St. Charles, Woodridge and Yorkville.

This story will be updated as more information becomes available.