OSF, Little Company of Mary Take Next Hospital Merger Step

October 17, 2019 - OSF HeathCare of Peoria, Illinois, recently announced that it signed a definitive hospital merger agreement with Little Company Mary Hospital and Health Care Centers based in Evergreen Park, Illinois. The organizations anticipate the hospital merger to take place on February 1, 2020.

Little Company of Mary Hospital and Health Care Centers currently has 2,100 employees, including a dedicated Core of Sisters, volunteers, physicians and benefactors. The health system serves the people of the southwest Chicago area.

OSF HealthCare is owned and operated by The Sisters of The Third Order of St. Francis. The organization employs nearly 21,000 Mission Partners in 126 locations. Of these locations, 13 are hospitals, nine are acute care and four are critical access.

 OSF HealthCare and Little Company announced intentions to merge in July. The health systems intend for the deal to allow both mission-driven organizations to come together and create new capabilities and advance technologies. Meeting the needs of communities is the most important facet for the health systems, and the deal would enable the systems to develop strategies that will meet the needs of their patient population health system leaders said in July.

Once the health systems finalize the hospital merger deal, they plan to call the new organization OSF Healthcare Little Company of Mary Medical Center, a name that health system leaders believe represents individual culture, while also highlighting the importance of the new partnership.

With four months to prepare for the merger, these two organizations will focus on the crucial regulatory and canonical approvals. The communities in the southwest Chicago area are the main focal point of the preparations, and action is being taking to ensure that there are strategies and plans in place for when the new year arrives.

“We admire the longstanding commitment to the gift of life demonstrated by Little Company of Mary,” explains Sister Judith Ann Duval, OSF major superior and chairperson of the board of directors. “As colleagues in this sacred calling of health care ministry, we are honored to carry on the Little Company name and tradition as they join our OSF family.”

There is much conflict and debate surrounding the topic of hospital mergers. As with any new change, there are a vast amount of benefits and drawbacks to consider.

The primary concern is how the partnership will affect consumers, and quality over quantity is of the upmost importance. According to the American Hospital Association (AHA), hospital mergers and acquisitions reduce healthcare costs and improve care quality.

“Mergers have become one of the critical means through which hospitals can provide their communities with high-quality, convenient and cost-effective care. The benefits of mergers allow hospitals to create connected networks of care and keep the focus where it belongs: on improving care for the patient,” explains Rick Pollack, AHA president and CEO.

While advocates argue that large providers operate more efficiently and reduce the cost of care, critics argue that they will squash competition, cause premiums to rise, shrink benefits, and sink provider payments.

Larger systems tend to have more experience and expertise, which provides an improvement in care to patients. “Large practices with more resources may be better able to coordinate care by multiple providers, more rapidly implement process improvements, more effectively harness technological advances, and more quickly identify new strategies that benefit more patients,” explains Laurence Baker, a professor of health research and policy at Stanford University.

There is also a downside to these mergers as well. Baker’s study analyzed prices paid by private insurers for 15 procedures, including cataract removal, vasectomy, and knee replacement. The study demonstrated that having a higher concentration of physicians in a geographical area actually increased the price of services.

Provider organizations should proceed cautiously when making their merger decisions to assure that patients in their communities benefit from the transaction. Improving care quality and reducing costs are the most important aspects of the merger arrangement and failing to deliver those benefits could result in regulatory authorities stopping the merger.