Mercy Hospital Files Chapter 11 Bankruptcy

Chicago’s oldest hospital is closer to shuttering this spring, even though the Illinois Health Facilities and Services Review Board last month rejected Trinity Health-owned Mercy Hospital and Medical Center’s request for approval to close its doors amid a pandemic that’s disproportionally impacting the Black patients the hospital primarily serves.

Mercy on Wednesday filed for Chapter 11 bankruptcy, declaring that “the quality of care at Mercy is an increasing concern as physicians and other colleagues have left Mercy and operating losses have accelerated to $7 million per month.”

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The action isn’t surprising to Northwestern University professor Sally Nuamah, who says it fits a pattern of actions taken by health care facilities after they’ve decided to close.

“We know from research that once a hospital or safety net institution is threatened for closure, that often those who are behind that closure begin to disinvest immediately so the bankruptcy is exactly what we’d expect from Trinity,” Nuamah said. “They make it such that there’s essentially nothing left to save.”

In a statement a Mercy Hospital spokesperson said, it is losing staff, experiencing mounting financial losses, and challenging the hospital’s ability to maintain a safe environment of care.”

Nuamah said that it’s purposeful: Mercy disinvests in staff and upgrades, making it such that patients don’t trust its care, or even to the point that there aren’t enough nurses and doctors such that ambulances can’t take patients to its emergency department, which in turn leads to greater financial loses.

In a statement a Mercy spokesperson said, “Mercy has been committed for over 100 years to providing care for patients in need, particularly those who could not access care elsewhere. We recognize the community’s desire that Mercy should stay open, but Mercy has provided as much care as possible while incurring losses that no single entity can afford alone. The system of care for the underserved on Chicago’s South Side is badly broken, and it is the system that must be fixed so patients can access the care they deserve.”

The bankruptcy could be a legal end-run around getting the otherwise necessary signoff from the state board in charge of regulating health care facilities expansions and closures, though Mercy has another chance to go before the regulators on March 16.

“We are extremely disappointed that Mercy chose this route, as opposed to working with the state and other willing health care partners to transform the hospital and sustain vital services to this community. We simply don’t believe they’ve done everything they could to work toward a different solution,” Illinois Health and Family Services Director Theresa Eagleson said.

Director of the Journey for Justice Alliance Jitu Brown, who is also a member of the Chicago Health Equity Coalition, has been fighting since summer to save Mercy – the Bronzeville hospital where he was born.

Already, one path that could have saved Mercy, in some capacity, died in May when leaders of four South Side hospitals – Advocate, Trinity, St. Bernard’s and Mercy – announced a merger deal was off after legislators failed to come through with a hoped-for billion dollar infusion of state funding

The Illinois Health Facilities and Services Review Board also this winter rejected a request by Mercy to close as a hospital, and to instead open a diagnostics center. Mercy leadership said the change would be transformative for the community, while critics call the plan a “sham” that would leave South Side residents without adequate health care options.

Brown wants Gov. J.B. Pritzker to actively intervene, to help find a buyer to take over Mercy, and “use his power as Illinois’ chief executive to bring Trinity Health Systems to the table with the community and to take the sale of Mercy so one of the many suitors that have said they’re willing to purchase the hospital and have it maintained as a full-service hospital.”

4th Ward Ald. Sophia King likewise wants another health care facility to step in and takeover Mercy.

“They really created their own financial woes and really just thumbed their nose at all of us who have been fighting so hard to make sure that there is comprehensive health care on the South Side of Chicago,” King said. “We’re trying to figure out who could take over because their leadership can’t be trusted right now. And so we’re not calling for Trinity to still mange Mercy. We just want to make sure that Mercy continues to operate under different leadership so that our community can have the comprehensive care that it deserves.”

King also said that she wants Mercy to be held accountable and to face repercussions.

It’s among the actions officials and activists are calling for.

State Rep. Lamont Robinson, D-Chicago, wants a “moratorium on hospital closures in this state, particularly in African American communities and Black and Brown communities and also poor communities across the state, particularly now that we’re dealing with COVID.”

He also wants to strengthen the state law that regulates health facility closures, to close loopholes like those he fears Mercy is using.

“We’re looking at all different ways that we can do this. I will tell you that the attorney general has been pulled on this as well, so he is helping us on the legal side to figure out what can be done,” Robinson said. “We’re talking about Mercy today, but it could be other safety net hospitals next week. And so we (have) a big issue around quality health care and how we provide resources to our safety nets across the state, and so we have to be able to fix this.”

That’s an idea Brown also said Illinois needs to pursue.

Safety net hospitals like Mercy largely care for patients who are uninsured or underinsured, and who rely on Medicaid, the government-backed health insurance for low-income individuals, and Medicare, which covers the elderly.

State health officials have previously denounced the notion that reimbursement rates don’t cover services, but increasing what the state pays when Medicaid patients get care is on Brown’s agenda.

“The state legislature needs to reform how our safety net hospitals are funded because through Medicaid and Medicare reimbursements, which only provide a fraction of the actual cost of the service, that’s really sabotage,” Brown said. “It’s manufacturing inequity. And so we need people who proclaim to be leaders to actually in this moment lead. Because the communities where people are dying from coronavirus should not be the communities where hospital services are cut.”

Follow Amanda Vinicky on Twitter: @AmandaVinicky

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