Two of the Chicago area’s biggest health-care providers are considering a merger that would create the largest Catholic hospital system in Illinois.
Officials from Resurrection Health Care and Mokena-based Provena Health said last week they have signed a nonbinding letter of intent to explore the merger.
Nonprofit health care analysts noted that mergers are becoming more common across a sector that tends to favor larger systems. The merger could help the issuers — both rated in the triple-B range — navigate changes that will come with the gradual implementation of the new federal health-care law, according to a statement from Guy Wiebking, president and chief executive officer of Provena Health.
Both nonprofit systems have six hospitals each. Together they would have revenues of nearly $3 billion. The new system would operate the 12 hospitals as well as 28 long-term care facilities, 50 specialty clinics, and six home health agencies, officials said. The boards from each system have agreed to conduct due diligence on the merger.
“We are grounded in a common history and heritage, sharing a very similar mission, set of values and enduring commitment to preserving and growing Catholic health care,” Resurrection president and CEO Sandra Bruce said in a statement.
Resurrection had $600 million of outstanding debt as of fiscal 2008, but since then has shed two financially troubled facilities. Provena had $639 million of outstanding bonds as of early last year.