Historic Mercy Hospital Can Be Sold. The Next Hurdle Is Reviving It.

A sign to save historic Mercy Hospital
Protestors gather outside of Loyola University Health Center on Dec. 8, 2020, to protest the closing of Mercy Hospital. State regulators approved the sale of the facility to a Michigan company. Manuel Martinez / WBEZ
A sign to save historic Mercy Hospital
Protestors gather outside of Loyola University Health Center on Dec. 8, 2020, to protest the closing of Mercy Hospital. State regulators approved the sale of the facility to a Michigan company. Manuel Martinez / WBEZ

Historic Mercy Hospital Can Be Sold. The Next Hurdle Is Reviving It.

Illinois regulators say historic Mercy Hospital on the Near South Side can be sold to a Michigan health care provider.

Now comes the hard part: resuscitating a hospital that filed for bankruptcy protection last month and has been cutting employees and closing services.

“This hospital is on life support,” Mercy physician Dr. Yousuf Sayeed said during the nearly five-hour-long board meeting. “Just walk the halls and you’ll see it.” Here are some key takeaways.

First: The vote. But there’s more process to come

The Illinois Health Facilities and Services Review Board, which regulates hospital projects to prevent duplication of services, approved the proposal late Monday afternoon with five yes votes. One board member abstained after missing a portion of the board meeting, while another member was absent.

Now Mercy in Bronzeville and Insight will work to sign a purchase agreement and try to dismiss the bankruptcy. The deal could be done by May 31, a Mercy spokeswoman said. Insight will likely change Mercy’s name, ending a long legacy in Chicago, and the company no longer would run Mercy as a Catholic hospital. Mercy is the oldest chartered hospital in the city.

Next: Here’s what Insight shared on its plans for Mercy

In Michigan, Insight runs a hospital, a few outpatient surgery centers, a biomedical campus and a research division. The company also provides free year-round programming for children ages 5-17.

“Our core value is love,” Insight CEO Dr. Jawad Shah told regulators. “We see providing excellent health care as one of the best expressions of love.”

Before the board vote, Shah and Insight chief strategy officer Atif Bawahab outlined their plans to keep Mercy a full-service hospital and make it financially solvent, potentially within a year. Mercy’s parent, giant national hospital group Trinity Health, says Mercy needs at least $100 million in upgrades.

Insight’s expertise is neuroscience and neurology, but Shah talked about the need for services such as more robust behavioral health services, particularly since Chicago closed mental health clinics. Rehabilitation services at Mercy are underutilized, Shah said, especially considering COVID-19 patients need these types of services to help them recover if they’re put on lifesaving ventilators to help them breathe. He also would work to reestablish Mercy’s emergency department, which was one of the busiest in Chicago before it was downgraded in recent months.

Shah, who is a neurosurgeon, said he was “astonished” to learn only two neurosurgeries were performed at Mercy in the last year, despite a hospital with more than 50,000 emergency room department visits, patients with multiple strokes or spinal problems and more than 250,000 outpatient visits.

Patients with private insurance are choosing other hospitals, while physicians are operating on patients at other facilities, Shah said.

“Just by introducing a robust neurosurgical line, we believe that the hospital could be solvent,” Shah said.

He ticked off other money-making services for the hospital, which mainly serves low-income and elderly patients. The operating rooms, for example, are “vastly underutilized” for a hospital with such a busy emergency department, Shah said.

Rebuilding, he underscored, especially the hospital staff, would take time. He and Bawahab expressed a sense of urgency, noting how every day, Mercy is winding down the hospital.

“They have made it clear that while we are aggressively working towards a definitive agreement, they are in parallel still committed to closure of the hospital,” he said. “We’re going to have to be reactive and see which services we can provide day one, and not continue anything in which we would feel we would be jeopardizing patient care.”

Rush University Medical Center, a prominent teaching hospital on the Near West Side, has offered to help treat patients while Insight rebuilds the hospital, Shah said.

Mercy, which is known for its many residency training programs, would remain a teaching hospital, he said.

Look back: How we got here

Mercy first announced plans last July to close the hospital after years of losing patients and the money they generate. Trinity has been preparing to close Mercy by May 31, unless a deal could be reached with Insight and Illinois regulators approve the sale.

For months, local local lawmakers and community organizers have drummed up pressure to find a buyer. Even though Insight surfaced, organizers wanted to delay the board vote to give them more time to vet more potential buyers. They don’t trust a buyer Trinity brought forward.

“Insight, for all the incredible work they’ve done, they’ve been caught in a trick bag,” said Jitu Brown, one of the main organizers. “Trinity Health Systems has demonstrated that they are a bad actor.”

Even as Mercy has been winding down services, the hospital’s CEO Carol Schneider told board members: “Insight’s plans are the best chance to save this hospital. … Please consider the human toll that comes with an adverse action today.”

Mercy is located in what many call a health care desert on the South Side. There are far fewer pharmacies, specialists and family doctors in the area compared to the more affluent North Side. As hospitals have either closed or cut back services over the years, Mercy is one of the remaining options for where pregnant women can deliver their babies on the South Side.

The majority of Mercy’s patients are Black, low-income and elderly — a particular concern during the COVID-19 pandemic for those who sought to keep the hospital open. Black and Latino Chicagoans have been disproportionately affected by the virus. Mercy also is the main hospital for Chinatown, a neighborhood just blocks away, and other nearby Chinese-speaking residents.

The final word: Regulators approved it, but with some reservations

Illinois regulators in December rejected Trinity’s proposal to close Mercy, fearing that shuttering the hospital would make it harder for people to access medical care, particularly during the pandemic.

During the board meeting on Monday, some regulators expressed frustration that, despite having reservations about the overall proposed sale, they couldn’t factor those concerns into their final votes. Legally, they had to approve the application to sell Mercy to Insight if all of the state’s criteria to do so was met — and it was.

Still, they peppered Insight leaders and their attorneys with questions. And they have some suggestions, noting the long fight from lawmakers and organizers to prevent Mercy from closing.

“I just implore Insight Chicago to listen to this community,” said board member Stacy Grundy. “As you all are forming your infrastructure and your process, include them.”

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