Loyola may regain some bargaining energy and increase referrals by including hospitals to its community, a risk CEO Shawn Vincent isn’t ruling in or out.
“Are you able to survive like we’re proper now, with three (hospitals) regionally? Sure,” he says. “However that doesn’t imply you cease trying. You at all times hold your choices open for the appropriate match.”
For now, Loyola goals to compete by including digital and residential well being companies, and opening multispecialty ambulatory care facilities that deal with sufferers nearer to the place they reside in inexpensive outpatient settings. However the technique itself isn’t cheap. Neither is it distinctive to Loyola.
“Chicagoland has sufficient inpatient mattress capability. The query is, the place is healthcare going and are you responding to the wants of the group within the areas the place healthcare is increasing,” says Trinity CEO Mike Slubowski. “We’re placing numerous funding into digital well being, dwelling well being, in-home monitoring and creating accessible ambulatory places—all the pieces from pressing care to multispecialty group apply.”
As a part of that technique, Loyola is consolidating its smaller clinics into giant multispecialty ambulatory care facilities, Vincent says.
Loyola plans to spend $70 million to construct such a middle in southwest suburban Tinley Park, pending state approval. The almost 72,000-square-foot middle is meant to serve the greater than 15,000 sufferers being handled at Loyola websites within the space, in addition to others who at present journey farther for care.
The challenge comes almost a 12 months after Northwestern acquired Palos. Because of the union, Loyola’s lease on the Palos Well being South Campus will finish by April 1, 2022.
Since most of the sufferers handled on that campus traditionally have been Loyola sufferers, Vincent says he expects to keep up a robust affected person base within the space. However business observers say Loyola may lose future referrals from Palos medical doctors if sufferers with advanced wants are prepared to journey to Northwestern Memorial Hospital in Chicago’s Streeterville neighborhood.
“They’re going to be challenged in the event that they don’t work out a method to create both a partnership to help their major care feeder system,” thereby rising referrals, “or establish a method to increase their attain and drive extra sufferers into the system,” says Dan Marino, managing accomplice at consultancy Lumina Well being Companions. Marino means that Loyola may look to accomplice with one other faith-based hospital chain within the space.
Loyola has proven a willingness to do acquisitions previously. It bought MacNeal Hospital in Berwyn in 2018 and 10 years earlier acquired Gottlieb Memorial Hospital in Melrose Park. Merger talks with Palos Well being in 2019 ended without a deal.
If Loyola is searching for offers, the planned breakup of a Chicago-area three way partnership between two out-of-state chains might create alternatives. Amita Well being contains 15 native Catholic hospitals owned by St. Louis-based Ascension and 4 Chicago-area hospitals owned by Florida-based AdventHealth. Any of these hospitals may very well be targets for Loyola.
A rising Catholic chain like 15-hospital OSF HealthCare represents one other risk. The Peoria-based chain entered the local market final 12 months when it merged with Little Firm of Mary Hospital in south suburban Evergreen Park. Loyola may make a pretty merger accomplice for OSF if it’s searching for extra Chicago-area hospitals.
“We’re at all times exploring potential alternatives to increase our mission and supply the very best high quality of look after our sufferers and the communities we serve, however we’re not actively having conversations” with the native faith-based hospital chains, Vincent says.
Representatives for Ascension and AdventHealth’s Chicago-area hospitals didn’t reply to a request for remark. OSF says it’s “at all times open to collaborative discussions when it is smart.”
Brief-term monetary pressures aren’t more likely to drive Loyola’s hand. The chain is worthwhile, posting almost $2 billion in working income and $199 million in web earnings for the fiscal 12 months ended June 30.
“Whether or not Trinity needs to develop on this market is the query,” Classen says. “It’s a singular market with so many tutorial medical facilities so the margins are in all probability considerably difficult relative to Trinity’s different markets.”
Trinity has proven it’s not prepared to undergo losses on this market. It sold Mercy Hospital & Medical Center for $1 earlier this 12 months, after the state denied its software to shutter the historic safety-net hospital. Trinity plans to open a $13 million outpatient middle in Bronzeville beneath the Mercy model.
“We’re very dedicated to Illinois,” Slubowski says, vowing to increase Loyola “throughout the continuum of care—not simply acute care.”
This story first appeared in our sister publication, Crain’s Chicago Business.
