State board OKs Mercyhealth's small hospital proposal for Crystal Lake

BOLINGBROOK – Mercyhealth finally was able to convince a state board Tuesday of the need for a hospital in Crystal Lake after about 14 years of trying.

The Illinois Health Facilities and Services Review Board voted to grant Mercyhealth’s request seeking to build a 13-bed small hospital in Crystal Lake, citing its belief that the size and scope of the proposed facility would not affect other area providers.

Review board members voted, 6-1, in favor of Mercyhealth’s proposed small hospital after the Rockford-based health care system defended against several deficiencies outlined in the 50-page staff report, including that the new hospital would create an “unnecessary duplication of service.”

“I believe that a 13-bed facility is not going to have an impact on other area providers,” board Chairwoman Kathy Olson said of her vote in favor of Mercyhealth’s plan.

Mercyhealth had asked for approval to build a $79.5 million, 13-bed small hospital and an $18.8 million medical office building at the corner of Three Oaks Road and Route 31, its third attempt since 2003 to build a hospital at the location.

The 111,346-square-foot proposed hospital will house 11 medical-surgical beds and two intensive-care beds, a comprehensive emergency room, two operating rooms, full-service radiology imaging, a laboratory and a pharmacy.

The 39,922-square-foot office building, which would be connected to the hospital, will have 42 examination rooms.

The request for the office building was granted later in a 6-0 vote in favor after no deficiencies were found in the report – with board member Deanna Demuzio absent for the latter vote.

“The residents of Crystal Lake have been asking us for a lot of years that they would like to have an emergency room in Crystal Lake that they can go to when they [have] an emergency,” said Javon Bea, president and CEO of Mercy Health System. “This is going to be a big-time, comprehensive emergency department for the city of Crystal Lake.”

Richard Sewell, the longest-serving active board member, was the lone member in opposition, taking issue with lending flexibility on the state requiring hospitals to have a minimum of 100 beds.

Both Sewell and fellow board member Brad Burzynski agreed, however, that changes to the standard should be brought into consideration to adequately fit the modern age of medicine.

“Some of the state certification standards are archaic,” Bea said. “They go way back to 1983, when patients would stay a long time in the hospital, and now that’s not the case. We’re doing surgical procedures on an outpatient basis today that would have been a 10-day stay not too many years ago.”

Comments from the board also assessed whether Mercyhealth could add beds to the proposed hospital in the future and determined state expansion regulations would allow an increase in the number of beds but at a slow enough rate – 1.3 beds every 24 months – that it would not affect other area providers. 

Competitors Advocate Health Care and Centegra Health System – which opened Centegra Hospital – Huntley in August – both opposed Mercyhealth’s plan during the public participation session and remained insistent no benefit would come from opening another hospital.

Aaron Shepley, serving as general counsel to Centegra, pointed to the “striking resemblance” between previous Mercyhealth projects – which the board rejected – as a reason to reject the proposed small hospital. Shepley is the mayor of Crystal Lake.

“In the simplest terms, this proposal is nothing more than a ploy designed to allow Mercy to do what Illinois courts and this board have rejected at least four times,” Shepley said.

Michelle Green, a spokeswoman for Centegra, said in a statement that the nonprofit health system’s position “has not changed in the nearly 15 years since Mercy first tried to build a facility in Crystal Lake.” 

“There is no need for the services Mercy proposes, and Crystal Lake is not the right location for a new hospital, no matter its size,” the statement concluded.

McHenry County board member Chuck Wheeler, R-McHenry, later responded in support of Mercyhealth.

“Centegra’s motivation in opposing this project is clear: They want to eliminate competition,” he said.  

Mercyhealth also got support from representatives from the McHenry County Economic Development Corp., the Crystal Lake Chamber of Commerce and other specialty health organizations around the region, such as the Epilepsy Foundation. Crystal Lake and Cary residents also voiced support, some wearing blue Mercyhealth shirts.

While previously referred to as a “microhospital,” Bea clarified the quality and complexity of the support staff within the facility would disqualify it from such a designation, and instead called it a small hospital.

Mercyhealth wants to have the hospital open no later than November 2020, but officials said it could open sooner. 

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