Mercy Hospital, A Historic Near South Side Medical Center, Plans To Close After Merger Plan Fails

The struggling hospital was one of four that had hoped to merge, but failed in its attempt to get money from the state to do so.

views of Mercy Hospital
A view of Mercy Hospital and Medical Center and nearby apartments in Chicago on Feb. 19, 2008. Eric Allix Rogers / Flickr
views of Mercy Hospital
A view of Mercy Hospital and Medical Center and nearby apartments in Chicago on Feb. 19, 2008. Eric Allix Rogers / Flickr

Mercy Hospital, A Historic Near South Side Medical Center, Plans To Close After Merger Plan Fails

The struggling hospital was one of four that had hoped to merge, but failed in its attempt to get money from the state to do so.

Mercy Hospital, a historic medical center on the Near South Side, plans to close, CEO Carol Schneider announced in a memo to employees today.

Mercy also plans to close its outpatient clinics, and build one new one that could treat more than 50,000 patients a year.

“We have worked hard over the last several years to put Mercy Hospital on a financially sustainable path while continuing to serve the healthcare needs of our community,” Schneider wrote in the memo. “But with the state’s elected officials declining to support our South Side Transformation plans in May, we have made the difficult decision to close the hospital sometime in 2021.”

Schneider was not available for an interview.

Mercy was one of four financially-struggling hospitals that aimed to merge into one giant health system. The goal was to build one to two new modern hospitals, and three to six outpatient centers that would ultimately replace the four existing aging hospitals. They also included South Shore, St. Bernard and Advocate Trinity hospitals. The price tag was steep — an estimated $1.1 billion. The four hospitals, dubbed the South Side Coalition, asked Illinois lawmakers to cover $520 million of the tab over five years. They said no.

Addressing health disparities was one of the reasons behind the proposed mega merger. Mercy said patients in the communities surrounding the hospital disproportionately suffer from chronic conditions.

And most of the patients Mercy treats are those at risk of getting COVID-19. The majority of patients are Black, low-income and elderly, state records show. Black and Latino Chicagoans have been dying most of the new coronavirus.

“The COVID-19 pandemic has further highlighted these disparities,” Mercy said in a separate statement. In her memo, Schneider said Mercy hasn’t been financially stable for several reasons: an uptick in demand for outpatient care that reimburses Mercy less than for more expensive hospital care; aging facilities; and ongoing financial losses.

Mercy loses about $4 million a month. The hospital needs at least $100 million in capital investments in the next five years “to maintain a safe and sustainable acute care environment,” Mercy said in the statement.

“Ultimately, change needs to happen on the south side of Chicago in delivering health care and Mercy can’t do it alone,” the statement said.

Mercy sits in the heart of Chicago, just south of downtown in the Bronzeville neighborhood. The hospital has one of the busiest emergency departments in the city, with just over 50,000 visits in 2018, the most recent state records show. Mercy had some 350,000 outpatient visits and nearly 12,000 hospital admissions.

It’s a big employer, too, with nearly 1,700 workers, and is a teaching hospital that serves as a training ground for the next generation of physicians.

Physicians and patient advocates worry about the ripple effect of Mercy closing. For patients, they’ll need to find new doctors and hospitals in the middle of a pandemic that’s already stretching the resources of medical centers, especially safety nets that largely serve low-income people of color, like Mercy.

“Going into the winter and even into next year knowing that we’re going to lose a hospital in Chicago that serves those populations that are at risk, is really disconcerting,” said Dr. Vineet Arora, an associate chief medical officer at the University of Chicago. “One of the big things is access to care. How are we going to provide equitable care for patients as a city? That’s the challenge that will be put to the other hospitals.”

That includes U of C, which is the biggest health system on the South Side, surrounded by much smaller and poorer hospitals.

Arora said she worries Mercy could be a sign of what’s to come in Chicago and across the U.S. — more hospital closures — as COVID-19 rages.

Dr. David Ansell, a senior vice president at Rush University Medical Center on the Near West Side who studies health equity, called Mercy’s planned closure “a tragedy.” He noted how other small hospitals on the South Side have cut back on services, like delivering babies. Mercy filled some of those gaps, delivering more than 1,600 babies in 2018. It also has a strong cancer treatment program.

“The South Side in particular is … a health care desert in terms of access, but the West Side has many frail hospitals and health systems as well,” Ansell said.

He said hospitals need more government funding, and that it would likely fall to the state. But amid the pandemic, Illinois leaders are predicting a massive budget hole.

“It points out to me, yet again, the lack of planning that we do and the lack of support for safety net institutions in this country at large, and certainly in Illinois,” said Margie Schaps, executive director of the Chicago nonprofit Health & Medicine Policy Research Group. “The South Side is bearing the brunt of a lack of planning.”

Mercy has a significant history in Chicago. The medical center is more than 150 years old. It’s where former Mayor Richard M. Daley was born.

Mercy said it plans to close between February and May next year. Due to a law change, state regulators do not have the authority to stop hospital closures.

Kristen Schorsch covers public health on WBEZ’s government and politics team. Follow her @kschorsch.