Mercy Hospital and Medical Center of Chicago files for bankruptcy after months of losses
During the first six months of FY 2021, Mercy lost an average of $5 million a month.
Chicago's Mercy Hospital and Medical Center filed for bankruptcy this week after it incurred more than $30 million in losses since last July.
The hospital, which is owned by Trinity Health, will discontinue its inpatient acute care services while it winds down as a full-service acute care hospital.
Until its expected final closure date of May 31, 2021, Mercy will continue to offer basic emergency treatment services, diagnostic imaging and care coordination services.
WHAT'S THE IMPACT
In the filing, Trinity called it a "difficult decision" to file for Chapter 11 bankruptcy but pointed to the ongoing financial struggles of the hospital. Mercy's financial troubles began before COVID-19 and the pandemic exacerbated revenue struggles.
During the first six months of fiscal year 2021, Mercy lost an average of $5 million a month, according to the filing. Trinity estimates that it will cost between $90 million to $115 million to restructure.
Despite the losses, Trinity does not expect it will have a "material adverse effect on the financial condition of Trinity Health or the Trinity Health Credit Group," it said in the filing.
THE LARGER TREND
Last July, Trinity Health announced plans to close Mercy, citing more than $100 million in renovations needed to keep the hospital a safe care environment and a failed $1.1 billion plan to form the South Side Coalition.
Also included in the closing announcement was the decision to transform Mercy's care delivery model from an inpatient model to an outpatient model. It announced plans in November to open the Mercy Care Center, an outpatient facility that would offer urgent care, diagnostic services and care coordination.
But late last year, Illinois officials from the Health Facilities and Services Review Board voted to keep the hospital from closing over fears that patients would lose access to care in an area that already faces health disparities.
The same board voted again in January to deny Trinity's application to build the Mercy Care Center. Critics argued that the outpatient facility would not be an equal replacement to the full-service hospital.
Despite the pushback from the review board, Trinity remains committed to its closure plan and said it anticipates the Mercy Care Center will open in 2021. There will be another meeting with the state review board on March 16.
Trinity is also facing financial hardship due to the COVID-19 pandemic. Last July, it said it expects to suffer revenue losses in the vicinity of $2 billion during fiscal year 2021. In response, the system said it was pursuing cost-cutting measures including eliminating positions, laying off employees and extending furloughs and scaled-back working hours.
Twitter: @HackettMallory
Email the writer: mhackett@himss.org
