NorthShore University HealthSystem is set to acquire Northwest Community Healthcare.

NorthShore to merge with Northwest Community Healthcare

July 10, 2020
by John R. Fischer, Senior Reporter
NorthShore University HealthSystem is set to merge with Northwest Community Healthcare (NCH), one of the last remaining independent hospitals in the Chicago area.

The deal is expected to provide Northwest patients greater access to specialists, research and data under NorthShore, and will transform NCH into a regional, community-focused healthcare hub in Chicago’s northwest suburbs. In exchange, NorthShore will be able to apply its community-based care approach to more patients.

"The NorthShore model is unique in this region and allows us to build upon what is working extraordinarily well at NCH, maintain our strong physician relationships while bringing added resources to expand care and services within our community," Steve Scogna, CEO of Northwest Community Healthcare, told HCB News. "Our Arlington Heights hospital will remain a full-service tertiary facility, providing patient access to specialty and subspecialty services, close to home. Our network of ambulatory facilities will also provide convenient and cost-effective services to evolve the healthcare delivery model to meet the growing demands of today’s consumers."

The decision to join NorthShore followed an 18-month strategic assessment by the NCH Board of Directors, which was attracted to NorthShore’s community-based approach.

Northwest brings a 509-bed hospital in Arlington Heights; 23 doctors’ offices; five immediate care centers; and other facilities in the northwest suburbs. The Arlington Heights hospital will join five others owned by NorthShore in Skokie, Highland Park, Evanston, Glenview and the Swedish Covenant Hospital recently acquired by NorthShore in Chicago’s North Side.

Patients who use these facilities will have access to two physician networks of employed and independent doctors for localized care decisions, as well as care and services through expanded access points.

Consolidation of independent hospitals with larger healthcare systems has become more common in recent years due to competition and the desire to attract patients, and is expected to grow even following the outbreak of the COVID-19 pandemic. It should be noted, however, that finances did not play a role in the decision by Northwest, which earned a revenue of $654 million for the year last September, up from $624 million the previous year. NorthShore made $2.2 billion in revenue, up from about $2.1 billion the year before, according to audited financial statements.

NorthShore previously had a plan starting in 2014 to merge with Advocate Health Care but walked away from it in 2017 after the Federal Trade Commission challenged the proposed merger. A federal judge agreed with the FTC on the grounds that Advocate and NorthShore together would be able to impose price increases on Illinois insurers, according to The Chicago Tribune.

Both NorthShore and Northwest do not anticipate the FTC will have significant concerns about their deal, and expect the transaction to close later this year, pending regulatory review and approval.

"Joining with an established system, whose model is unique yet mission and culture mirror ours, will allow NCH to strengthen its core programs, drive improved access and expand specialized care for our patients and community," said Scogna. "This is a merger of two great organizations that will preserve the NCH facilities, physician partnerships and most importantly, our longstanding commitment to the community."