Chicago's Rush to absorb independent suburban hospital
CHICAGO – The stand-alone suburban Little Company of Mary Hospital and Health Care Centers will join the Chicago-based Rush system that includes Rush University Medical Center.
The proposed combination, announced Wednesday, is the latest in a continuing wave of nonprofit healthcare consolidation in Illinois and nationally.
The two signed a non-binding letter of intent. Under the proposed union, LCMH would remain a Catholic ministry. Rush is a secular not-for-profit provider of healthcare services. The Archdiocese of Chicago approved the LOI on Sept. 29 and the Rush board on Sept. 28.
The union would extend the three-hospital Rush system’s reach into the south suburbs while providing the independent hospital a more affluent partner as the sector navigates federal healthcare reform and threats to repeal and replace the Affordable Care Act.
The deal is subject to due diligence by both organizations and state and federal regulatory approvals “which is expected to take several months,” a statement from the systems said.
“We feel confident that aligning with Rush would allow us to continue to serve our community, as we have for nearly 90 years,” Sister Sharon Ann Walsh, who chairs Little Company’s board, said in a statement.
Little Company of Mary Hospital is a 272-bed community hospital with more than 2,000 employees in Evergreen Park. It has annual revenues of $210 million.
“This potential partnership is very important to our overall plans to make clinical, research, and educational resources more accessible to our patients and our physician partners,” Rush President Michael Dandorph said in a statement.
The Rush system includes Rush University Medical Center in Chicago, Rush Oak Park Hospital located near west of Chicago, and Rush Copley Medical Center located in the far western suburb of Aurora. Rush has 11,500 full time employees. It has total operating revenue of $2.3 billion.
Rush carries ratings of A-plus with a positive outlook from Fitch Ratings, an A1 and stable outlook from Moody’s Investors Service, and an A-plus and stable outlook from S&P Global Ratings.
Fitch affirmed the rating on $474 million of bonds in December and Moody’s in January. S&P affirmed the rating last month. The system has about $700 million of debt.
“We view Rush as being on a favorable trajectory as it focuses on medium- to long-term benefits from systemization, strengthening its partnerships and relationships over a wider service area, and embarking on key strategic projects, including several outpatient projects,” S&P wrote.
S&P affirmed Little Company of Mary’s A-plus issuer rating and stable outlook in December. “The stable outlook reflects our view that, despite the challenged operating performance highlighted by historical operating losses, LCM's excellent unrestricted reserves give it the flexibility to address the changing landscape of health care,” S&P wrote. The hospital reported about $200 million of long term, variable-rate debt in its latest financial results.