Loyola Will Spend $270 million on Suburban Hospital

Courtesy of Loyola Medicine

Loyola Medical plans to purchase MacNeal Hospital in Berwyn for $270 million, records show.

First announced in October, the deal is currently awaiting approval and will close March 1 if authorized, according to an application filed with the state review board that oversees hospital development projects.

Owned by for-profit healthcare giant Tenet, which has three other hospitals in the Chicago metropolitan area, MacNeal Hospital is a 374-bed general acute, or short-term, care hospital at 3249 S. Oak Park Ave. in west suburban Berwyn. It’s four miles from Loyola’s 557-bed medical center in Maywood, and eight miles from Loyola-owned Gottlieb Memorial Hospital in Melrose Park.

Representatives from Loyola and Tenet didn’t respond to requests for comment before the time of publication.

The documents show the transaction also gives Loyola Medical — which is owned by Catholic non-profit Trinity Health — control of the Chicago Health System — an independent practice with more than 1,000 physicians — and its accountable care organization (ACO). An ACO is a group of doctors and hospitals responsible for a group of patients, which helps eliminate unnecessary costs and improve quality by coordinating all the care each patient needs.

Trinity, which controls more than 90 hospitals nationwide, purchased Loyola University Health System from the university for more than $1 billion in 2011. Loyola retained ownership of its medical school and nursing program and remained involved with the hospitals’ management.

The purchase of MacNeal puts Loyola Medical in a position to boost their reach by referring more patients to Loyola, bringing in more income and potentially cutting costs, according to Loyola economics professor Timothy Classen.

“One of the ways a hospital gets paid is from referrals,” Classen said. “Having another hospital in the area where providers in Maywood might get referrals from MacNeal is another way to provide more referrals to Loyola.”

Tenet controls more than 70 hospitals across the country, including Weiss Memorial Hospital in the Uptown neighborhood, along with two other suburban hospitals in Melrose Park and Oak Park. One of a handful of for-profit hospitals in Chicago, Tenet is moving to leave the Chicago market only four years after it entered and might eventually be put up for sale, according to a report by the Wall Street Journal.

That’s largely because the Chicago market already has too many other hospitals, Classen said.

“I think in Chicago the market is fairly competitive and there’s a lot of non-profit providers that are high quality like Northwestern, UIC, Loyola and Rush [Memorial Hospital],” Classen said. “There’s a lot of teaching hospitals, so our market’s pretty saturated and I think the for-profit [hospitals] have a hard time competing as a result.”

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