CRYSTAL LAKE – Centegra Health System officials said they no longer will admit most patients at their 108-bed Woodstock hospital in a bid to save money and improve care at hospitals in Huntley and McHenry.
With fewer patients and losses that topped $30 million through the first three quarters of its fiscal year, Centegra plans to close its intensive care and medical-surgical operations at the Woodstock facility and move those services – and hospital beds – to McHenry and Huntley.
The Woodstock facility’s comprehensive emergency department would become a basic emergency department under plans approved by the nonprofit’s board. That means “all patients who need inpatient care or surgery” would be taken to Centegra hospitals in McHenry and Huntley, the memo said. The changes are to take effect by Aug. 14, according to the memo.
Some services will be relocated to the Woodstock hospital, Centegra CEO Michael Eesley said. The hospital’s behavioral health inpatient program will remain, and outpatient mental health services will be moved from their existing location on South Street to the Woodstock hospital.
“With changing reimbursements, increasing bad debt and today’s uncertain health care climate, Centegra Health System has continuously evaluated where and how we provide services to patients,” Eesley wrote in a memo to employees. “After careful consideration, we have made the decision to shift all acute inpatient care to Centegra Hospital – McHenry and Centegra Hospital – Huntley.”
Centegra Hospital – Huntley, which opened in August 2016, has 128 beds, and Centegra Hospital – McHenry has 179 beds.
Eesley said the changes will benefit patients.
“When you get volume consolidated to one area, you get more efficient at it, you get better at it, and the clinical outcomes prove that,” he said.
Woodstock City Council member Mike Turner, who is serving as interim mayor while Brian Sager is out of town, said he was let down by the news.
“I am disappointed in their decision, and I am disappointed for the city,” he said. “The city doesn’t control those decisions, but we would prefer to see them stay and maintain their services in Woodstock.”
Facing financial pressures
Centegra Health System officials project their financial losses could reach $40 million by the June 30 end of its fiscal year, according to a May 3 filing with Fitch Ratings. Centegra’s leaders attribute the results in large part to the cost of opening the Huntley hospital and a rise in uncompensated care.
The changes could save the health system $15 million annually, Eesley said. Executives also are working on other strategies to save money.
Eesley said that the loss is not because it cannot fill the 128 beds at the Centegra Hospital – Huntley facility it opened last August.
Centegra officials made decisions on which services to offer at each location after looking at patient demographics, Eesley said. Officials said there is low demand for inpatient beds, and Centegra’s facilities are close enough together that everyone still can get what they need.
“Most care is delivered by you going to your physician’s office, ... by you going to immediate care. We feel we’ve got it pretty well covered,” Eesley said. “Our facilities from Woodstock or any demographic area are probably no more than 10 to 12 miles, tops, you would need to drive.”
Centegra is McHenry County’s largest employer with 4,400 employees. Between 50 and 120 jobs could be eliminated as a result of the change in services at Woodstock, Eesley said.
“Every effort is being made to secure positions for Centegra Hospital – Woodstock associates, and leaders are meeting with affected teams to explain the process of relocation throughout the system,” Eesley wrote in the memo. “Please be sensitive to the needs of these individuals and teams throughout their transitions.”
Changing local health landscape
Centegra needs approval from the Illinois Health Facilities and Services Review Board before it can make the planned changes permanent. Much of the changes will be in place by mid-August, Eesley said.
“I think the plan we have in place is very solid,” Eesley said. “I think it will have a better impact not only on the clinical outcomes but on the financial performance of Centegra, and that helps us.”
Centegra’s announcement came a day after the state review board’s approval of a plan by Janesville, Wisconsin-based Mercyhealth’s to build a 13-bed small hospital in Crystal Lake. The $79.5 million facility will include a 13-bed hospital and an $18.8 million medical office building near the intersection of Three Oaks Road and Route 31.
Centegra and Northwestern Medicine still are working toward a merger that hospital officials announced earlier this year, Eesley said.
“This isn’t something that happens overnight, obviously,” he said. “We have a lot of things to do before we join Northwestern, but that will occur.”
Centegra will host a series of forums with employees Thursday to further explain the changes, according to Eesley’s memo.
“Like other health systems across the country, we must ensure our organization’s financial health by becoming more efficient,” Eesley told employees. “We remain committed to the culture you value, and our focus continues to be on providing patients the care they need, close to home.”