Chicago’s Ressurection Health To Buy West Suburban Hospital

CHICAGO – Chicago-based Resurrection Health Care – a Roman Catholic system – announced Monday it would acquire the financially struggling independent hospital West Suburban Hospital Medical Center. The hospitals did not disclose financial terms of the deal and it is still pending the approval of state regulators.The announcement put to rest speculation that began earlier this year that the two were discussing an affiliation. West Suburban will add to Resurrection’s existing eight-hospital network to better position it to compete with Oak Brook-based Advocate Health Care, according to past statements from market participants. West Suburban will lose its status as one of the few independent hospitals in the Chicago area.West Suburban had begun shopping around for a potential partner last year as it struggled to find a source to pay for a long list of capital needs. The hospital had struggled financially for several years posting loses in 2000 and 2001 that led to credit downgrades. It turned an operating profit of $400,000 for the fiscal year ending June 30. Rating agency analysts, who had said they were monitoring the merger reports, were not immediately available to comment. “Fitch will determine the impact on both organizations’ ratings if an agreement is reached,” analysts wrote in March. Resurrection’s $458 million of outstanding debt carries ratings in the low AA-range to the high A category. West Suburban carries ratings in the BBB category.West Suburban’s affiliation with a Catholic system is likely to raise the eyebrows of some analysts and market participants. The hospital was previously aligned with Loyola University Medical Center — like Resurrection, a Catholic facility — but that merger was scrapped more than four years ago because West Suburban refused to adhere to Loyola’s restrictive policies regarding reproductive health care services.