Report: Area Hospital Could Throw Off Health Care Market Area hospitals could lose millions, according to report commissioned by three large hospitals. By Gloria Casas

A report filed with the Illinois Health Facilities and Services Review Board Thursday found if one of two proposed hospitals—in Huntley or Crystal Lake—the board is considering gets approved, three area hospitals could lose between $65 to $78 million combined in net revenues annually.

The loss could affect the services provide to the uninsured and underinsured, according to the report complied by a consulting firm.

Sherman Hospital in Elgin, Advocate Good Shepherd Hospital in Barrington and St. Alexius Hospital in Hoffman Estates commissioned the report and filed a letter of objection, along with the report, to Centegra Health System’s and Mercy Health System’s application with the review board.

The board is accepting letters in support and in opposition of the Certificate of Need application both Centegra and Mercy filed late last year. The deadline is June 8. A hearing on both CON applications is scheduled June 28 in Joliet.

Centegra wants to build a hospital at its Haligus Road complex while Mercy wants to build one at Route 31 and Three Oaks Road.

Each of the three hospitals spoke against both hospital proposals at separate hearings in the spring. The report, however, examines the affect a Centegra-Huntley and Mercy Crystal Lake hospital would have on the health care “Safety Net,” which is a term used to describe the charitable services hospitals provide to needy people, including those on Medicaid.

For example, 60 percent of Sherman’s obstetrics patients are on Medicaid. Hospitals get reimbursed for Medicade, but not the full amount for the services provided.

A new hospital in McHenry County would result in Sherman losing 16 percent of its commercial obstetrics, which helps offset the cost of the charitable care, for a total of about $1.2 million, the report stated. Sherman “may have to curtail obstetrics services and scale back or eliminate other services to the community to subsidize the obstetrics services,” the report stated.

It is a similar situation for Advocate Good Shepherd and St. Alexius, each of which provide millions of dollars of care to needy families outside their communities.

An additional argument: both Centegra and Mercy will not be able to provide safety net services due to the debt of building a new hospital. Neither Centegra nor Mercy have a plan to provide those services, the report stated.

According to the report, a McHenry County hospital in either Crystal Lake or Huntley would mean a loss of 400 full-time jobs in the health care industry since the hospitals would see a loss in revenues.

Both Mercy and Centegra issued statements Thursday supporting their CON application.

"Population figures and other data strongly indicates that a new hospital in Crystal Lake would complement existing facilities while improving healthcare, creating jobs, reducing medical costs and expanding services for the public,” said Rich Gruber, Vice President Mercy Health System.

Located in the most densely populated area in McHenry County, a Crystal Lake Hospital would serve approximately 163,000 people and provide safety-net medical care to our the most vulnerable residents who need access to quality healthcare and emergency medical care in their community,” he said.

Centegra Senior Vice President of Strategic Planning Susan Milford’s said McHenry County has greatest need for hospital beds of anywhere in the state. In fact, this shortage of beds is forcing many local residents to seek care outside of the county.”

"Our competitors do not decide the need for a new hospital. The state does,” she said.

“Our plan is responsible and is focused on benefiting the families in this underserved community,” Milford said. “Ultimately, this is about bringing healthcare services to people who need them. Delivering healthcare to the 9,000 seniors living in Huntley’s Del Webb community, for example, is more important than protecting the market share of a Kane or Cook County hospital.

Milford said a Huntley hospital would bring an economic impact of $152 million, more than 800 new construction jobs and 1,100 new associates to the community.

The village of Huntley encouraged people on their website to send in their letters of support before next week’s deadline.