Consolidation among healthcare providers in the Chicago area appears to be continuing with the announcement last week that Condell Medical Center, a community hospital in Libertyville, Ill., will be talking exclusively with Advocate Health Care, a Chicago area integrated delivery system.
Condell and Advocate made the announcement last Wednesday in a press release that said the two organizations "have entered into an exclusive agreement to negotiate a merger."
The release went on to say that, "Senior leadership from both organizations say the strategic partnership under exploration would allow both not-for-profit health providers to strengthen and align their missions."
Condell, which operates a 283-bed hospital in Lake County, has been struggling financially. Its BBB rating was affirmed by Fitch Ratings, a New York-based credit rating firm.
"Condell's financial profile is characterized by adequate operating profitability and debt service coverage and extremely weak liquidity," Fitch wrote in its report. As of September 30, unrestricted cash and investments dropped to $21.3 million, or just 26 days of cash and 13.5 percent cash to debt.
Fitch said Condell reported that its cash position has been bolstered through the receipt of about $65 million related to the sale of certain office buildings.
"Fitch will take further rating action on Condell's outstanding bonds if, and when, a formal merger agreement is reached or further financial or operational information is received," the rating firm said.
Advocate Health is rated AA- by Fitch.
In announcing the merger discussions with Advocate, Condell apparently has declined a reported offer from Lake Forest Hospital, according to the Chicago Tribune.
Condell executives say their facility is the largest in Lake County, a growing area north and west of Chicago. The medical center staffs 257 beds and provides tertiary services such as cardiac surgery, neurosurgery and radiation therapy. Condell also operates four immediate care facilities, home services and a day care center.
Not-for-profit Advocate operates seven acute-care hospitals, one specialty hospital, two children's hospitals and a variety of other healthcare services and care delivery sites.
The Chicago Tribune reported that at least two other community hospitals are seeking suitors.