Founded 168 years ago as the city’s first hospital, Mercy survived the Great Chicago Fire of 1871 but is succumbing to modern economics, which have underfinanced the hospitals serving the poor. In July, the 412-bed hospital informed state regulators it planned to end all inpatient services as soon as February. Fifty-five percent of Chicagoans living in poverty and 62% of its African American residents live within Mercy’s service area, according to Mercy’s 2019 community needs assessment, a federally mandated report. The neighborhoods served by Mercy are distinguished by higher rates of death from diabetes, cancer and stroke. Babies are more likely to be born early and at low weight or die in infancy.
“You’re going to have this big gap of about 7 miles where there’s no hospital,” Ansell said. “It creates a health care desert on the South Side.”
While rural hospitals have been closing at a quickening pace over the past two decades, a number of inner-city hospitals now face a similar fate.
“We’ve had three hospital closures in the last year or so, all of them Black neighborhoods,” said Dr. David Ansell, senior vice president for community health equity at Rush University Medical Center, a teaching hospital on Chicago’s West Side. He said the decision to close Mercy “is really criminal in my mind, because people will die as a result.”
By the nature of their mission, safety-net hospitals, wherever they are, struggle because they treat a large share of patients who are uninsured — and can’t pay bills — or are covered by Medicaid, whose payments don’t cover costs.
Mercy is following the same lethal path as did two other hospitals with largely lower-income patient bases that shuttered last year: Hahnemann University Hospital in Philadelphia, and Providence Hospital in Washington, D.C., which ended its inpatient services. Washington’s only public hospital, United Medical Center — in the city’s poorest ward — is slated to close in 2023 as well, and some services are already curtailed.
So far, urban hospital closures have remained infrequent compared with the cascading disappearance of their rural counterparts. But the closing of a few could portend problems at others. Even some of those that remain open may cut back crucial specialties like labor and delivery services or trauma care, forcing patients to travel farther for help when minutes can matter.
Today only 498 of 5,230 general hospitals in the country are owned by governments or a public hospital district. Instead, many hospitals in low-income urban neighborhoods are run by nonprofits — often faith-based — and in some cases, for-profit corporations. In recent years owners have unloaded safety-net hospitals to entities with limited patience for keeping them alive.
In 2018, the for-profit hospital chain Tenet Healthcare Corp. sold Hahnemann to Joel Freedman, a California private equity investor, for $170 million. A year later, Freedman filed for bankruptcy on the hospital, saying its losses were insurmountable, while separating its real estate, including the physical building, into another corporation, which could ease its sale to developers.
In 2018, Tenet sold another safety-net hospital, Westlake Hospital in Melrose Park, Illinois, a suburb west of Chicago, to a private investment company. Two weeks after the sale, the firm announced it would close the hospital, which ultimately led the owners to pay Melrose Park $1.5 million to settle a lawsuit alleging they had misled local officials by claiming before the sale they would keep it open.
Some government-run hospitals are also struggling to stay open. Hoping to stem losses, the District of Columbia outsourced management of United Medical Center to private consulting firms. But far from turning the hospital around, one firm was accused of misusing taxpayer funds, and it oversaw a string of serious patient safety incidents, including violations in its obstetrics ward so egregious that the district was forced to shut the ward down in 2017. Earlier this year, the district struck a deal with Universal Health Services, a Fortune 500 company with 400 hospitals and $11 billion in revenues, to run a new hospital that would replace United, albeit with a third fewer beds. Universal also operates George Washington University Hospital in the city in partnership with George Washington University. That relationship has been contentious: Last year the university accused the company of diverting $100 million that should have stayed in the medical system. In June, a judge dismissed most of the university’s complaint.
Dr. Maya Rolfe, who was a resident at Mercy until July, said, “Mercy serves a lot of high-risk women...People put their money where they want to,” said Rolfe, the former medical resident at Mercy in Chicago. Noting that the city has no qualms about spending large sums to beautify its downtown while other neighborhoods are in danger of losing a major institution, she said: “It shows to me that those patients are not that important as patients that exist in other communities.”