CHICAGO – The stand-alone suburban Little Company of Mary Hospital and Health Care Centers and Chicago-based Rush University Medical Center system have canceled plans for the hospital to join the Rush system.
The two signed a non-binding letter of intent that was approved by the Rush board and Chicago Archdiocese in late September. The Evergreen Park-based LCMH was expected to remain a Catholic ministry. Rush is a secular not-for-profit provider of healthcare services.
The two announced Wednesday they were dropping their efforts. "Representatives of the Rush system and Little Company of Mary Hospital & Health Care Centers have mutually agreed to terminate their integration discussions. Both organizations maintain their mutual respect for each other and will pursue efforts independently to advance care and service to Chicago-area patients and communities,” the two said in a statement.
The deal would have extended the three-hospital Rush system’s reach into the south suburbs while providing the independent hospital a more affluent partner as it struggles with red ink.
They did not disclose the reason behind the cancellation.
The not-for-profit healthcare sector has seen a continuing wave of consolidation in Illinois and nationally as the industry seeks to rein in costs and deal with federal healthcare mandates and shifting payor mixes.
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.
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. It has about $700 million of debt although all of it is not rated by the three.
“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 in its last report.
S&P affirmed rates Little Company of Mary at A-plus with a stable outlook in 2016. “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 in its last report.
The hospital reported about $200 million of long term, variable-rate debt in its latest financial results.