Rush University System for Health, the corporate parent of Rush Oak Park Hospital, announced last week that it is planning to merge with Endeavor Health to form what would be a healthcare powerhouse in Northern Illinois.
If approved by federal and state regulators, the Rush-Endeavor combination would create one of the largest hospital groups in the state, with 12 hospitals and more than 400 healthcare sites, from the northern suburbs through Chicago and out to the western suburbs.
“Together, Rush and Endeavor Health have an opportunity to create a stronger, more connected health system that sets a new standard for how care is delivered and experienced across our communities,” said Gerald “J.P.” Gallagher, president and CEO of Endeavor Health.
Dr. Omar Lateef, president and CEO of Rush University System for Health and Rush University Medical Center said the proposed healthcare system “will embody and expand the foundational values for which both systems are known: excellence, access and health equity, backed by a leading university that drives research and trains our future healthcare leaders.”
Lateef said the proposed system “will expand upon the work Rush has done on the West Side of Chicago to strengthen our impact in communities across the region to ensure more patients benefit from the expertise, innovation and compassion that define us.”
The proposed healthcare system would operate under the Rush name, which both parties say reflects “the brand’s strong national reputation and position as a leading academic institution, and reinforcing a shared commitment to advancing excellence in health sciences education, quality care and innovation.”
The merger would combine Rush’s widely respected academic medical training capability with Endeavor’s financial strength and broad geographic presence. It would also help assure what one professional observer said was a more seamless healthcare experience within the new healthcare group.
Endeavor Health said it would provide $1 billion in incremental investment in the new hospital system. A “significant portion,” they say, “will be dedicated to community partnerships addressing social determinants of health and creating a sustainable infrastructure to support the underserved.”
Elyse Cutler, an Oak Parker whose background includes work in healthcare mergers and acquisitions, gave the proposal a thumbs up, saying, “It makes a ton of business sense. It fills in the market geography.”
Cutler said the merger would fill in Endeavor’s geographic gaps, including the absence of a presence of a teaching hospital in the city of Chicago. Endeavor has hospitals in eight municipalities, including Evanston, Glenview, Highland Park, Skokie, Arlington Heights, Elmhurst, Naperville and Chicago (Swedish Hospital), as well as Linden Oaks Behavioral Health Hospital in Naperville.
Besides Rush Oak Park, there are Rush hospitals in Chicago and Aurora. Rush University is comprised of Rush Medical College, the College of Nursing and the College of Health Sciences. It is ranked among the top hospitals in the nation by U.S. News & World Report, and a Top Teaching Hospital by The Leapfrog Group.
“The community hospitals Endeavor brings to the table are really strong,” said Cutler. She praised Rush’s medical academics “for what they’ve done and what they’ve built. I think they do a good job.”
Cutler said the merger has a potential to improve outcomes for people, “especially those who might divide their (health)care across the two institutions right now, to improve outcomes meaning make their care easier and more convenient.”
“It would definitely make things easier for patients and improve access,” she said. She said that a system that made it easier for patients to access different but related medical services would also make it easier for the healthcare system “to ensure people get the preventative care that they need.”
Nothing can happen, of course, until regulators approve the merger. Cutler said the merger process will generally play out in two parts, official approval and then long-term integration.
“You still need to go through an antitrust review,” she said. “So they can’t just merge. They need permission from the (Federal Trade Commission) and that’s called a Hart-Scott-Rodino Review. I’d guess next summer is when they would close the merger.”
The second part would be the likely the biggest challenge, said Cutler, who likened hospital groups to battleships, saying, “they’re big and complicated.”
“The integration of the entities will take a long time, getting the IT systems to talk to one another, getting all of its administrative infrastructure to get integrated can take several years.”
Regulatory approval for healthcare mergers isn’t guaranteed. Back in September 2014, Endeavor’s precursor, NorthShore University Health System, applied unsuccessfully to merge with Advocate Health Care. In December 2015 the FTC and the Illinois Attorney General filed a lawsuit to block the deal, arguing it would give the combined system control over 50 percent of general acute care inpatient hospital services in northern Cook and Lake counties.
It would also, regulators argued, have enough market power to force insurance companies to accept price increases as high as 8%. After a federal judge granted an injunction in March 2017, Advocate and NorthShore abandoned their application.
NorthShore eventually merged with Edward-Elmhurst Health to become Endeavor Health. And Advocate Health Care merged with Aurora Health Care in April 2018.
Endeavor’s Gallagher said their intent with the proposed merger is to create the best healthcare system possible.
“Our teams know how to keep people healthy,” he said, “and our vision for true community health expands access to quality care, reduces life expectancy gaps and achieves measurable progress in advancing health and well-being across the region. We take seriously our responsibility to every community, patient and team member who interacts with our system, and we are committed to doing our very best for everyone we serve.”