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Analysis

NorthShore, Northwest Community Healthcare Announce Merger

By Jack O'Brien  
   July 08, 2020

The two Chicago-based provider organizations expect the transaction to be finalized by the end of 2020 pending regulatory review and approval.

NorthShore University HealthSystem and Northwest Community Healthcare (NCH) announced plans to merge Wednesday afternoon.

NorthShore, an organization with annual revenues of $2.1 billion, and NCH, an organization with just over $1.8 billion in total patient revenue, plan to form a "a regional, community-focused healthcare hub" in Chicago's northwest suburbs and "extend geographic access" for patients.

The two Chicago-based provider organizations expect the transaction to be finalized by the end of 2020, pending regulatory review and approval.

"By bringing together two very prominent and community-minded healthcare institutions, we have a tremendous opportunity to transform the practice and delivery of medicine for the future," J.P. Gallagher, CEO of NorthShore, said in a statement. "This partnership extends our commitment to our communities to provide the most accessible healthcare, services and resources available."

In a statement, NCH said it would maintain its flagship hospital in Arlington Heights as well as its existing ambulatory care and physician offices.

"NorthShore is one of the country's preeminent systems for clinical care, research and innovation," Steve Scogna, CEO of NCH, said in a statement. "Our shared emphasis on community-focused care coupled with a commitment to strengthening physician relationships were two of the discerning factors in deciding to pursue this opportunity."

Wednesday's announcement is the latest development regarding provider consolidation in the Chicagoland area this year.

In late May, the planned merger of four hospitals located on the city's South Side was scrapped.

Related: South Side Chicago Hospital Merger Called Off

Advocate Trinity Hospital, Mercy Hospital and Medical Center, South Shore Hospital, and St. Bernard Hospital signed a nonbinding merger agreement in January to form an "independent, integrated healthcare system" with $1.1 billion in assets.

However, in a letter sent to the Illinois Department of Healthcare & Family Services, the four providers cited the establishment of the Hospital Transformation Fund as giving the organizations "no path forward for our project that would transform health care on the South Side and help address disparities in health for the patients we serve."

Earlier this year, NorthShore acquired Swedish Covenant Health, a nonprofit provider organization based in Chicago. 

NorthShore dropped its own merger plans with Advocate Health Care back in March 2017 after a federal judge ruled against the deal.

Related: NorthShore, Advocate Drop Merger Plan After Judge's Ruling

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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