Elmhurst Memorial Healthcare in Talks to Merge with Northwestern Memorial Healthcare
Merger would provide a financial boost to EMHC, patients would have more access to clinical trials, according to sources.
Northwestern Memorial Healthcare and Elmhurst Memorial Healthcare announced Thursday they are exploring a merger.
Discussions, which could take several months, are in the early stages. But the move would help Northwestern expand its presence in the western suburbs, and it would strengthen the financial position of EMHC, which is facing hundreds of millions of dollars in debt, according to a Thursday article in Crain's Chicago Business.
Northwestern is financially strong, with net revenue for 2010 at $1.6 billion, up from $1.4 billon in fiscal 2009, according to audited financial reports.
EMHC's debt is due to construction of its new 866,000-square-foot hospital on Brush Hill Road, which opened in June. A release issued by EMHC does not mention debt as a reason to partner with Northwestern, however.
"This affiliation would offer us a unique opportunity to become a destination provider in the western suburbs of Chicago with regionally significant and distinctive clinical program," EMHC President and CEO W. Peter Daniels said in the release.
Fitch Ratings gave EMHC an A- "Stable Outlook" rating in February.
While there are certain financial risks associated with construction of the new facility, long-term benefits are expected, according to Fitch.
The A- rating reflects EMHC's "continued good operating cash flow, strong liquidity relative to expenses, and a solid market position."
Its credit outlook is dependent on "Elmhurst's ability to execute on its strategy for top-line revenue growth (and) improved volumes and profitability," according to Fitch.
Elmhurst's high ratio of insured patients to Medicare patients is attractive to Northwestern, according to a Friday Crain's article.
Affiliation with Northwestern would give EMHC patients more access to clinical trials. Northwestern Memorial's more than 1,600 affiliated physicians also serve as faculty members of the Feinberg School of Medicine at Northwestern University, which has the reputation of being one of the country's premier academic hospitals.
"Our affiliation would provide EMH and its patients sophisticated on-site clinical programs and increased access to Northwestern’s advanced specialty services, clinical trials and research programs,” said Dean M. Harrison, president and chief executive officer, Northwestern Memorial HealthCare.
Northwestern also recently acquired Lake Forest Hospital in the northern suburbs.