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Naperville’s Edward Hospital to merge with Elmhurst Memorial

Edward Hospital Elmhurst Memorial hospital have finalized their merger deal. | Sun-Times MediFile

Edward Hospital and Elmhurst Memorial hospital have finalized their merger deal. | Sun-Times Media File

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Updated: February 24, 2013 6:22AM

Edward Hospital & Health Services of Naperville and Elmhurst Memorial Healthcare Tuesday announced plans to merge to become one of the larger integrated health systems in the state.

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, officials at both hospitals said.

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.

The letter of intent also provides for Edward President and CEO Pam Davis to be named CEO of the new health system upon completion of the merger.

The move is the latest in a series of hospital mergers around the Chicago area. In 2011, Central DuPage Health and Delnor Community Health System merged. It is now known as Cadence Health. Also in 2011, the merger of the Provena Health system and Resurrection Health Care was approved. That merger involved Provena Mercy Medical Center in Aurora and other hospitals throughout northern and central Illinois, including Provena Saint Joseph Hospital in Elgin and Joliet-based Provena St. Joseph Medical Center. The group is moving to the name Presence Health.

Last year, Elgin’s Sherman Health System announced that it is pursuing a partnership with the Oak Brook-based, 12-hospital Advocate Health Care network, which include such hospitals as Advocate Lutheran General in Park Ridge, Advocate Good Shepherd in Barrington, Advocate Good Samaritan in Downers Grove and Advocate Condell in Libertyville.

Experts say that the merger mania going on has its roots in the larger hospitals of today, which include a variety of care centers and office buildings and imaging centers and labs and fitness centers and sometimes more. Mergers allow for economies of scale when funding a variety of facilities.

Larger size also allows a chain of hospitals to have more clout when negotiating for prices with insurance companies and suppliers.

In addition, the new federal health care rules are also forcing hospital to rethink their operations.

“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. “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.”

Peter Daniels, president and CEO of Elmhurst Memorial, said that “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. 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.”

Edward Hospital has been an independent force in health care in Naperville for generations. Word of the merger announcement spread quickly around the city Tuesday.

City officials, including Mayor A George Pradel, called the merger “something that makes business sense.”

“I also just learned about this proposed merger late Tuesday morning and I think it makes sense for the two to merge together as both as excellent hospitals,” Pradel said. “Given the economy and the way things are, this allows for more efficient and effective service, which I assume helps all of us.”

Pradel said he believes the merger will have no adverse effect on Naperville residents and that the city “will continue to be a leader in providing health care services.”

“Together, I think care will be more effective and this will only add to our notoriety of providing excellence in the field of health care,” Pradel said.

Ray Kinney, who serves as on the board of the Naperville Development Partnership, echoed Pradel’s sentiments and said that “the geographical reach makes sense.”

“This is exciting news and I know that Elmhurst is certainly proud of its institution as Naperville is of ours, and I’m also happy to see that Pam Davis is going to stay on as CEO, which speaks well of her ability as a leader in moving the merger forward,” Kinney said. “Consolidating today or having strength is numbers is the way things are going, whether it’s in hospitals, car dealerships, or anything else. This move strengthens health care now in northern and southern DuPage County.”

Naperville Area Chamber of Commerce President and CEO Mike Evans said the merger is probably good business for both hospitals.

“I think this merger is a good thing in that you have two, strong independent heathcare providers and this merger will only improve healthcare from a regional standpoint,” Evans said. “By combining the best and the brightest, this can only make things better, and I don’t see that this weakens either institution.”

The merger of Edward and Elmhurst 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. DuPage Medical Group has more than 370 physicians, including a strong presence in the communities also served by Elmhurst Memorial and Edward.

Founded in 1926, Elmhurst Memorial Hospital today is Elmhurst Memorial Healthcare, a comprehensive health system with multiple locations and services. In June 2011, Elmhurst Memorial Healthcare opened a new, 866,000-square-foot, state-of-the-art acute care hospital with 259 private patient rooms.

Edward Hospital & Health Services is a full-service, regional healthcare provider. Founded in 1907 as a tuberculosis sanitorium and converted to a community hospital in 1955, Edward Hospital in Naperville 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 for a wide variety of services.

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.

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