OSF HealthCare and Little Company of Mary Hospital and Health Care Centers have announced that they plan to merge, revealing that they have entered into “a period of exclusive negotiations.”
The two Catholic institutions say they will spend the next several months finalizing agreements and seeking the necessary regulatory and Catholic church approvals for the merger, which they expect to go through in early 2020.
OSF HealthCare Chief Executive Officer, Bob Sehring, said: “Partnership development, particularly with other mission-driven organizations, is a key component of how we are successfully responding to the call to share our ministry. We have long admired the strong Catholic heritage and commitment to the gift of life demonstrated by Little Company of Mary, and believe that together, we can create better health and deliver value for our communities.”
Little Company of Mary Hospital President and CEO, John Hanlon, said health care was continuously evolving and the merger with OSF HealthCare was part of the process of preparing for the future in terms of technology and innovation as well as preserving Catholic health care.
“OSF HealthCare is a leader in transforming health care, and we believe our firm foundation of faith and collective sense of purpose and mission will allow for sustained quality, coordinated care and innovation,” Hanlon said.
Hanlon added that the two institutions had been in talks for several months. “We are very impressed with their commitment to the Catholic mission of health care and their commitment to innovation in health care — not just the technological aspect, but the delivery of it, as well.”
A prepared statement said that, in addition to adding advanced technologies and innovative capabilities, the agreement would allow OSF HealthCare and Little Company of Mary to share services, develop and expand academic partnerships, and create strategies to meet the unique needs of various populations.
If the merger goes through, it will mark the end of Little Company of Mary Hospital and Health Care Centers’ days of operating as an independent entity, Crain’s Chicago Business reported.
With the deal, it was reported that Little Company of Mary would “gain deeper pockets, better pricing and advanced technology.
The two institutions did not disclose any financial terms of the deal.
The Peoria-based OSF HealthCare is an integrated health system owned and operated by The Sisters of the Third Order of St. Francis. It operates 13 hospitals located outside the Chicago area and in downstate Illinois. Little Company of Mary Hospital and Health Care Centers, based in Evergreen Park, is a community-based, Catholic hospital with 298 beds. It also has a Cancer Center affiliated with the Medical Oncology Group of the University of Chicago Hospitals, and 10 satellite facilities.
Patch reported that by merging with Little Company of Mary Hospital and Health Care Centers, OSF HealthCare will have a clinical presence in Chicago.
According to the Chicago Tribune, a spokesperson for Little Company of Mary revealed that they had been in talks with other potential merger partners, although she would not reveal how many.
Towards the end of last year, the Rush University system and Little Company of Mary announced that they had signed a non-binding letter of intent for Little Company of Mary to join the Rush system.
However, in April, it was revealed that the plans had collapsed. The two institutions did not say why the deal had collapsed.
Following the collapse of that deal, Rush entered into talks to buy Chicago’s Swedish Covenant Health, with the two nearing an agreement. However, that deal fell through and Swedish Covenant is now set to be acquired by NorthShore University HealthSystem.
Little Company of Mary CEO, Hanlon, was quoted saying they had “explored other affiliation partners in the past and we explored several affiliation partners this time around, as well. What’s different this time is the cultural fit with OSF.”
It has been reported that in recent years, hospitals have faced such pressures as late Medicaid payments; reimbursements from state and federal health insurance programs that don’t fully cover the cost of care; and rising costs for technology and medications, among other factors. With that in mind, a number of independent hospitals have concluded that their future lies in joining larger health systems.