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NorthShore reportedly merging with Edward Elmhurst Health to create nine-hospital system

by John R. Fischer, Senior Reporter | August 26, 2021
Business Affairs
NorthShore is reported to be in talks to merge with Edward Elmhurst Health to create a nine-hospital system
Chicagoland’s NorthShore University HealthSystem is allegedly discussing a potential merger with Edward Elmhurst Health, reports Crain’s Chicago Business.

Sources close to the former told Crain that if true, the merger would introduce a new nine-hospital system in Illinois, one that would include a behavioral health hospital.

NorthShore once was considering another big merger with Advocate Health Care in Downers Grove. Announced in 2014, the deal would have resulted in a 16-hospital group with approximately 45,000 employees, and allowed it to care for more than three million patients a year, reported HCB News.

But concerns of the merger preventing a competitive healthcare market in Chicago and potentially hiking up prices for patients led the FTC to challenge the deal in 2015 and eventually resulted in NorthShore and Advocate calling it off in 2017 after a judge sided with the FTC. Previously the same judge had ruled in favor of NorthShore, only for the Seventh Circuit U.S. Court of Appeals to rule that he did not consider the proposed merger's price-setting clout enough and sent the case back to him.

NorthShore has since grown into a six-hospital system through a number of deals, including its acquisition of single-hospital system Northwest Community Healthcare in Arlington Heights; and its purchase of the 312-bed Swedish Covenant Hospital in Chicago. The deal with Northwest added a 509-bed hospital, 23 doctors offices, five immediate care centers and other facilities in the northwest suburbs to NorthShore. It also gave patients access to two physician networks of employed and independent doctors for localized care decisions.

Rising costs and declining inpatients even before the pandemic have made acquisitions and mergers among independent hospitals and smaller networks commonplace, with the pandemic only accelerating these trends further, according to Jordan Shields, managing director of Chicago investment firm, Jupiter Advisory.

“The Chicago market has gone from being one of the least consolidated in the country to being moderately consolidated,” Shields told NewsQuick24. “Both NorthShore and Edward Elmhurst will benefit from the added scale, but neither has room for strategic growth given that small, autonomous independent companies have now largely joined Northwestern, Advocate and Amita.”

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