No Merger Between Elmhurst Memorial and Northwestern Memorial
CEO tells Crain's the "timing is not optimal" for the two healthcare organizations to merge.
Elmhurst Memorial Healthcare has ended merger talks with Northwestern Memorial HealthCare, according to a Thursday article in Crain's Chicago Business.
Elmhurst President and CEO W. Peter Daniels was quoted in the article as saying, "We recently agreed with Northwestern Memorial that the timing is not optimal for a full affiliation."
Elmhurst Patch and other media outlets reported last October that the two entities were exploring a merger to expand Northwestern's reach into the western suburbs. The merger also would have helped shore up the financial position of EMHC, which is facing hundreds of millions of dollars in debt due to the construction of its new 866,000-square-foot hospital on Brush Hill Road.
It is unclear whether Thursday's Supreme Court ruling upholding the Affordable Care Act had any impact on the decision to end talks. EMHC, along with other hospitals in the state, also is fighting to regain its tax-exampt status.
Elmhurst Memorial Healthcare on Thursday released the following statement:
"Elmhurst Memorial Healthcare and Northwestern Memorial HealthCare have been engaged in a very thoughtful and thorough exploration of a potential affiliation since October 2011. Our organizations recently agreed the timing is not optimal for a full affiliation. The healthcare industry is currently confronted by one of the most challenging and transformative times in our history.
"Northwestern Memorial and Elmhurst Memorial have agreed to terminate the letter of intent to affiliate, ending the period of exclusive discussions. While Elmhurst Memorial and Northwestern Memorial will continue to discuss ways to work together, we each will also continue to explore opportunities with other healthcare organizations that would be beneficial to our patients and the communities we serve."
This story will be updated as more information becomes available.
John Iwaszkiewicz
8:50 pm on Thursday, June 28, 2012
The affiliation with Northwestern would have been a big boost for Elmhurst, but with tax exempt status still blowing in the wind, the real costs of Obamacare still unknown, and Medicaid cuts impacting the bottom line, taking on the debt of Elmhurst Memorial would be a real challenge for any hospital.
What I would really like to know is how the executives of Elmhurst Memorial would gain/lose in the transition. Would this be affiliation or realistically a complete takeover? If I were a Health provider with deep pockets looking at this kind of debt in a potential affiliate, I wouldnt be too generous with existing management. I would want complete control over my investment with my own people overseeing the entire operation. With negotiations behind closed doors who knows what the real reasons were..
But the devil, they say, is always in the details.
Just ask Justice Roberts.
Meredith Blake
5:29 pm on Friday, June 29, 2012
John, I am in total agreement with your comments. Elmhurst Hospital has somewhere around 13 Vice Presidents and a hospital with their number of beds (about 260 +/-) should have at the most, 4 !! These VP's have been on the payroll for numerous years while all their underlings and front line workers were given the heave- ho in order to "cut the budget", keep the bond ratings up and finance the oversized and underutilized new facility. Shame on the previous CEO and his puppet Board of Directors that handed him whatever he wanted on a silver platter. I thought that Directors were to act as the Fiduciary's of the organizations that they were appointed to...but not in this case.
Joanna Hoelscher
9:52 am on Saturday, June 30, 2012
Northwestern's tax exempt status is also under review and they have added two new facilities, already, to their existing operation in the City so may well have a large debt of their own that impacted the decison not to take on another.