- The Chicago area's NorthShore University HealthSystem and Edward-Elmhurst Health completed their merger, creating Illinois' third-largest health system after securing approvals from the Federal Trade Commission and Illinois Health Facilities and Services Review Board, officials said Wednesday.
- Annual revenue for the combined organization is expected to exceed $5 billion as the merger brings together nine hospitals and 6,000 physicians, which will be the state's second-largest physician network, officials said.
- J.P. Gallagher, NorthShore's CEO, will lead the combined group while Mary Lou Mastro, who served as Edward-Elmhurst's CEO, will become the chief executive of the system's south region.
NorthShore has acquired hospitals at a steady clip over the last few years, consolidating power primarily around Chicago.
In 2019, NorthShore announced plans to acquire Swedish Covenant Health, which operated a hospital on the city's north side. One year later, NorthShore announced plans to acquire Northwest Community Healthcare, adding a sixth hospital under NorthShore's umbrella.
In its latest bid, NorthShore inked a deal in September to merge with Edward-Elmhurst, giving NorthShore a footprint in the region's western suburbs with the addition of two general acute hospitals and one focused on behavioral health.
These deals followed NorthShore's failed bid to merge with then Advocate Health Care after federal regulators blocked the union in court in 2017. Antitrust regulators argued the marriage would have created the largest hospital system in the northern suburbs of Chicago with control of more than 50% of inpatient hospital services. Regulators said the combination would have harmed consumers through higher prices and fewer incentives to increase quality.
It's not uncommon for hospital executives to tout that mergers will result in savings, but that's not typically the case.
Research shows that hospital prices tend to rise after mergers, especially after a union between close competitors. Other research does show mergers across markets within the same state result in price increases of about six to 10%, according to a 2016 study.
In an attempt to crack down on hospital mergers, President Joe Biden has called on the Department of Justice and FTC last year to "enforce the antitrust laws vigorously." And in an executive order last year, the president instructed antitrust regulators to "review and revise" merger guidelines to ensure patients go unharmed.
The amount of hospital mergers has declined during the pandemic compared to previous years, but there was still robust activity throughout 2020 and 2021, with 79 and 71 deals, respectively. There were 86 hospital transactions in 2019, according to consultancy Ponder and Co.