Dive Brief:
- Rush Health and Swedish Covenant Health are in early stages of merger discussions, Crain’s Chicago Business reports.
- According to knowledgeable sources, Crain's reports the talks are exploratory in nature with no guarantee that a deal with occur.
- Rush, a three-hospital system that includes Rush University Medical Center in Chicago and two suburban hospitals, declined to comment on the reported merger talks. Swedish Covenant did not respond to a request for comment.
Dive Insight:
The potential merger points to the industry’s continued appetite for consolidation as hospitals adapt to lower admissions and tighter reimbursement. It also poses the risk of a further loss of competition in the greater Chicago area.
Other Chicago players have expanded their reach through various acquisitions in recent years. Last year, Advocate Health Care finalized its merger with Wisconsin-based Aurora Health, creating a mega-regional player that straddles both Illinois and Wisconsin. Northwestern Medicine now extends from Chicago all the way to more rural areas such as Sandwich, Illinois, a town 60 miles west of the city of Chicago.
Dallas-based Tenet Healthcare exited the Chicago market in July of last year with the sale of Louis A. Weiss Memorial Hospital, Westlake Hospital and West Suburban Medical Center to Pipeline Health and TWG Partners, a Chicago-based healthcare investment firm.
The three-hospital deal — part of a larger restructuring aimed at improving Tenet’s financials — followed the 2017 sale of MacNeal Hospital and related operations to Loyola Medicine.
Rush has 664 beds and about 7,000 employees. Its signature hospital, RUMC, is located on the west side of Chicago. Situated on the city’s north side, Swedish Covenant has a 312-bed hospital, physicians group, medical fitness center, fundraising arm and managed care group. It is one of a shrinking number of independent hospitals serving the Windy City.
Earlier this month, Boston-based Beth Israel Deaconess Medical Center and Burlington, Massachusetts-based Lahey Health completed their merger, creating the second-biggest system in the commonwealth after Partners Healthcare.
The Massachusetts Health Policy Commission approved the merger after the systems agreed to a string of conditions, including price controls, investments in safety net hospitals, mandatory Medicaid participation and expanded access to behavioral health and substance abuse treatment.