Illinois again denies Mercy project

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Thursday, December 8, 2011
— For the second time in six months, the Illinois Health Facilities and Services Review Board riddled Mercy Health System and its plan to build a hospital and clinic in Crystal Lake, Ill.

While the project might be wounded, it is not dead, said Rich Gruber, Mercy’s vice president of community advocacy.

“We’re going to take a little time and look at our options,” Gruber said Wednesday after the board voted 6-2 against the Mercy proposal.

Board members said Mercy had not demonstrated a clear need for the project.

“We’ll make a decision based on what we heard from the board—both from the six who opposed it and the two who were in favor of it—and determine how we can best serve that area and provide better access to needed health care,” Gruber said.

It’s possible that Mercy could appeal the board’s decision or reapply with a different project for Crystal Lake, he said.

In June, the same board voted 8-1 against a certificate of need for a $200 million, 128-bed hospital and clinic in Crystal Lake. The certificate of need is required for construction.

Mercy scaled back the project, cutting $85 million from the cost and reducing the facility to 70 beds, including 56 medical/surgical beds, 10 obstetrics beds and four intensive care unit beds.

“We listened closely in June,” Mercy CEO Javon Bea testified Wednesday. “We reduced the cost, which is a goal of the CON (certificate of need) program, and we think 70 beds is in line with the needs of the area.”

Mercy officials have long argued that the need for a hospital in Crystal Lake is critical because of significant growth in that part of McHenry County. Transportation infrastructure, they’ve argued, hasn’t kept up with population growth, which makes access to existing emergency medical centers in the area difficult.

But an analysis prepared by the board’s staff found that there are nine hospitals within 45 minutes of Crystal Lake that are operating below capacity. The report also suggested that new hospitals proposed by Mercy in Crystal Lake and Centegra Health System in Huntley would diminish performance at the other hospitals.

The report also said Mercy’s proposal did not meet state standards that new hospitals offer at least 100 beds.

Bea called that rule archaic and said it is longer practical for an industry that is shifting its focus away from inpatient hospital stays toward outpatient services and preventative care.

Gruber noted that the board sidestepped the 100-bed rule earlier this year when it issued a certificate of need for a 94-bed hospital in Shiloh, Ill.

He said the board’s rules allow discretion, and just because a proposal might not meet one requirement doesn’t mean the board must deny the permit.

The board chairman then silenced Gruber’s references to the Shiloh project, saying the board does not compare one project to another.

This was Mercy’s third proposal for a hospital in McHenry County.

In 2003, it advanced an $81 million hospital and clinic on its 16-acre site. The proposal moved forward before being derailed when the board overseeing its approval became embroiled in a kickback scandal involving the Mercy project but not Mercy officials.

Bea said that since Mercy first proposed a hospital in Crystal Lake, it has faced a “trifecta of barriers,” which he said includes the 100-bed rule, a second rule pertaining to other providers within 30 minutes and a third that calls for a minimum of 20 obstetrics beds.

He said the rules don’t reflect current health care trends and are instead “turf protectors that deny consumers a choice.”

Mercy’s two most recent proposals have moved on a parallel track with those of Centegra, which wants to build a $233 million, 128-bed hospital in Huntley, less than 10 miles from Mercy’s Crystal Lake site.

The board rejected the Centegra plan with a 4-4 vote Wednesday.

Last updated: 7:09 pm Thursday, December 13, 2012

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