Palos Health operates Palos Hospital in Palos Heights.
By Bob Bong
Northwestern Memorial HealthCare and Palos Health last week announced they had signed a Letter of Intent for Palos Health to join Northwestern Medicine subject to approval of a definitive agreement by their respective boards of directors and regulatory approval.
“ Both health systems are guided by providing patients access to high-quality, compassionate care, close to where they live and work” said Dean M. Harrison, president and CEO of Northwestern Memorial HealthCare. “As a member of Northwestern Medicine, Palos Health will join Chicago’s premier integrated academic health system and have access to groundbreaking clinical trials, research, and leading clinical programs.”
“ Palos Health has offered innovative approaches to community-based healthcare for nearly 50 years” said Dr. Terrence Moisan, president and CEO of Palos Health. “The proposed affiliation with Northwestern Medicine will further enhance Palos Health’s already strong reputation for providing exceptional community-based care with Northwestern’s world-class academic healthcare expertise.”
A merger would give Palos access to a prestigious system that often captures top health care rankings. Northwestern would benefit by broadening its reach into the south suburbs. Northwestern operates 10 acute care, rehabilitation, and behavioral hospitals in Chicago, the northern, northwest and western suburbs.
Palos Health offers patients in the southwest suburbs access to an award-winning 425 licensed bed hospital in Palos Heights and a South Campus in Orland Park, which provides access to primary and specialty care, advanced diagnostic technology and a surgery center. The health system includes 3,000 employees and a 600-member Medical Staff.
Palos Health is currently building a 50,000-square-foot office center at U.S. 30 and Owens Road in Mokena. The Illinois Health Facilities and Services Review Board approved Palos Health’s application in December. The center is expected to open next spring.
The three-story office will have about 50 exam rooms and offer primary and specialty care services in areas such as dermatology, immediate care, internal medicine, obstetrics and pediatrics, as well as imaging services including mammography, ultrasound and X-ray, according to Palos Health.
In its application with the state, Palos Health noted that patients in the Mokena area in need of services now travel to its South Campus at 153rd Street and West Avenue in Orland Park. The new Mokena facility will help address existing demand and anticipated future demand for such care, it said.
The $30 million project comes after Palos Health wrapped up a major expansion of its South Campus in Orland Park in 2018.
That expansion was done in collaboration with Loyola Medicine. Palos Health enlarged the south campus, which had been 130,000 square feet, by an additional 83,000 square feet. The expansion created a new specialty and primary care clinic with nearly 50 exam spaces, and brought new services such as outpatient surgery and radiation oncology that are jointly operated by Palos and Loyola.
The new merger announcement comes a year after Palos and Loyola ended their own merger talks.
In January of 2019, both said they were exploring a merger and had signed a nonbinding letter of intent to pair up. In May, they said they had ended discussions but that their existing partnership would continue.
Palos carries a AA-minus from Fitch Ratings reflecting “the system's very strong net adjusted capital related ratios, sound position in a stable but competitive service area, and expectation of continued” good operating margins and manageable capital spending plans.
“ While PCH's financial performance through the most recently available data has not yet indicated any significant impairment attributed to the coronavirus pandemic, material changes in revenue and cost profiles are expected to occur across the sector as economic activity suffers and the impact of government restrictions are seen in future financials,” Fitch wrote in affirming the rating in May. “Fitch expects the system to weather these challenges and revert back to historical operating performance.”