Analysis: Expect Sequel in Centegra, Mercy Hospital Battle

Centegra CEO Michael Eesley was disappointed Tuesday evening, but he also held out some optimism that Centegra someday would be able to build a hospital in Huntley.

The Illinois Health Facilities and Services Review Board issued an intent to deny, with a vote 8-1, against Centegra’s Certificate of Need application to build a 128-bed hospital on Haligus and Algonquin roads. Centegra would invest $233 million in the project.

Centegra will re-evaluate its CON application and address the concerns the board raised, specifically whether there is a real need for the number of beds included in the plan, said Susan Milford, senior vice president of strategic marketing and planning and wellness services.

Milford said Centegra could ask the review board to reconsider the CON as early as its next meeting in August, but it likely would take some time to address the board’s concerns. It also could be considered in October.

Mercy Health Care System, which wants to build a hospital in Crystal Lake, also will receive a notice of intent to deny from the board. Mercy, too, plans to bring its plan to the board again. It is uncertain whether both plans will be considered at the same time, as they were Tuesday.

A recurring theme throughout the marathon hearings centered on whether there is a real need for more hospital beds, and whether any new hospital would be a duplication of services already offered at existing ones.

Those were the major arguments opposing the new facilities, as presented during Tuesday’s testimony by Sherman Hospital in Elgin and Advocate Good Shepherd Hospital in Barrington, among others.

After the hearings, both Sherman and Advocate expressed their thanks to the board for considering the arguments.

“We support the Review Board’s intentions to vote no on these projects, and believe this supports our contention that these projects would duplicate health care services that already exist to serve the residents of northern Kane County and southeastern McHenry County,” Rick Floyd, president and CEO of Sherman Health, said in a release.

Floyd’s release also stated, “Sherman remains confident that the Review Board will find that no new hospitals are needed in McHenry County.”

While the Illinois Department of Public Health found that 83 beds are needed in the planning area that includes southern McHenry County, the review board seemed uncomfortable approving a hospital when occupancy rates at other hospitals are low.

Another sticking point: The figures the IDPH used to determine bed need were from 2005-06, before the economic downturn. An IDPH spokesman told the board the figures are provided for the board to interpret and as a guide for hospitals.

Centegra, however, is hopeful that the board considers a consultant’s projections that show Huntley will experience rapid growth in the next few years which will create a greater need for a new hospital. Eesley said Centegra wants to be proactive rather than reactive to that population growth.

The village of Huntley, which has continued to grow despite the economy, is expected to be the largest town in McHenry County within the next 10 to 15 years. A Centegra-Huntley hospital also would serve surrounding communities including Lake in the Hills, Algonquin and a portion of Crystal Lake.

The review board has not approved a new hospital in 30 years, so Centegra and Mercy may be making many more appearances before the board as they push to make their projects become a reality.