Local Business

Mercy Health System merging with Rockford Health System, plans to keep McHenry County facilities

HARVARD – Mercy Health System, which operates a 65-bed hospital in Harvard and health care facilities in Woodstock, plans to merge with Rockford Health System to create a larger, more efficient system.

The new health system, which doesn’t yet have a name, would continue to pursue building a hospital in Crystal Lake despite past failures, said Javon Bea, Mercy Health System’s president and CEO. The merger, which must be approved by the Illinois Health Facilities and Services Review Board, won’t affect operations at Mercy Harvard Hospital or Mercy Woodstock Medical Center.

“We don’t anticipate any changes to those facilities,” Bea said Tuesday.

The two health systems will merge early next year to create an organization with more than 7,500 employees, 550 physicians, 80 outpatient clinics and five hospitals serving more than 750,000 people in northern Illinois and southern Wisconsin. Bea said it would have annual net revenue of about $1.1 billion.

The boards of the two organizations voted to approve the merger Thursday and announced it this week. No money will change hands in the deal, Bea said.

“Rockford Health System is an exceptional health care provider with an outstanding group of well-respected specialists, sub-specialists and primary care providers with a mission, vision and values that mirror our own,” Bea said in a statement.

Bea will lead the combined health system, which will operate under a newly formed parent company with a nine-member board of directors. The board includes Bea, four representatives from Rockford Health System and four representatives from Mercy Health System. Mercy Health System and Rockford Health System will keep their names.

The merger of Mercy Health System and Rockford Health System follows a wave of consolidation in the health care industry in recent years spurred by the Affordable Care Act.

Last month, Advocate Health Care, one of the biggest health systems in the nation, announced plans to merge with NorthShore University HealthSystem. The combination, to be called Advocate NorthShore Health Partners, will have 16 hospitals, 4,438 beds and 45,000 employees. The mergers have added to the competitive pressures smaller health systems face, Crain’s Chicago Business reported.

But Centegra Health System, which has hospitals in Woodstock and McHenry and is building a $233 million hospital in Huntley, said Tuesday its plans remain unchanged.

“Centegra Health System continues to focus on our strategies to serve our community members’ health and wellness,” said Susan Milford, senior vice president of strategy and development at Centegra Health System. “We remain confident in our direction and will continue to provide sophisticated medical care and advanced technologies according to best practices. As we expand to meet the needs of the communities we serve, we solidify our position as the community’s health care leader.”

Mercy has been trying to build a hospital in Crystal Lake, where it sees unmet health care needs, for more than a decade. The merger won’t change that, nor will Centegra’s 128-bed Huntley hospital, Bea said.

“We’ll be continuing plans for a facility in Crystal Lake,” Bea said.

Asked if there was a timeline for a Crystal Lake hospital, Bea said “the sooner the better.”

Mercy’s latest proposal for a 70-bed hospital in Crystal Lake was turned down in July.

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