Daniel White/dwhite@dailyherald.com
Pam Davis, Systems CEO of Edward-Elmhurst Healthcare, left, and Mary Lou Mastro, President and CEO of Elmhurst Memorial Hiospital.
Daniel White/dwhite@dailyherald.com Pam Davis, Systems CEO of Edward-Elmhurst Healthcare, left, and Mary Lou Mastro, President and CEO of Elmhurst Memorial Hiospital.
The changes taking place at Elmhurst Memorial Healthcare are emblematic of the evolution of the health care industry in America.

The Elmhurst-based hospital spent $450 million to open a 866,000-square-foot facility in 2011, complete with 259 private rooms, a new family birthing center, state-of-the-art surgical equipment, all set on a prairie-style campus featuring waterfalls and walking gardens.

Then this past July, Elmhurst merged with Naperville-based Edward Hospital & Health Services to create a partnership with more than $1 billion in annual revenue.

“To build a hospital designed to carry us into the future, then go through a merger, has been very exciting, and a lot of work,” said Mary Lou Mastro, president and CEO of Elmhurst Memorial Healthcare.

New hospital construction and hospital mergers are the driving forces in health care today, as the industry has been shaken by competition and new federal regulations.

Residents of Chicago and the suburbs have access to some of the finest health care in the world. But growing competition has many suburban hospitals on a building spree, adding private patient rooms, new cardiac and oncology centers and robotic surgery equipment, among other amenities patients are demanding.

“We are reaching a point where no one will need to go downtown anymore to the teaching hospitals. They can get the same quality care here,” said Pam Davis, CEO of the new Edward/Elmhurst health system.

Davis, who also is president and CEO of Edward Hospital, is marshaling in a $64 million expansion of the Naperville facility. When completed later this year, the construction project will add 36 beds for orthopedic and spinal patients, 24 beds in the intensive care unit, and a physical therapy gym.

The merger addresses the shifting landscape of health care due to the new Affordable Care Act. Hospitals are no longer rewarded by the federal government and insurers for filling beds and conducting more tests and procedures on patients. Instead, they are being measured for how well they keep patients healthy, and penalized for readmissions and further procedures.

Hospitals and physicians also are being required by the health care law to store patient records electronically so information can be shared. The theory is that electronic records will increase patient safety and lower costs by eliminating duplicative tests.

Mergers allow hospitals to increase economies of scale and attain the daunting challenge of providing better service at a lower cost. The Edward/Elmhurst merger, for example, creates a service area of 1.7 million people, with close to 1,700 physicians.

“It’s the law of large numbers,” Davis said. “You have to have a large network of hospitals, physicians and clinics to have a more active role in keeping patients healthy.”

The hospital construction and merger trends taking shape in DuPage County are playing out across the suburbs, according to Glenview-based Walsh Consulting Group, which has consulted on many hospital construction projects in Chicago and the suburbs.

“We continue to see a very competitive environment in Chicago,” said Keith Borgeson, a senior consultant at Walsh. “There are a lot of choices in Chicago. Hospitals are expanding to address the needs of their patients and to retain them.”

Among the suburban projects with which Walsh has been involved:

• A $250 million expansion at Northwest Community Hospital in Arlington Heights, which opened in 2010 and added 200 single-patient rooms, including private labor and delivery rooms.

• A $90 million expansion at Advocate Condell Medical Center in Libertyville, which opened in 2011 and featured private patient rooms and a heart and vascular center.

• The $120 million Alexian Brothers Women and Children’s Hospital, a 126-bed facility that opened in 2013 at St. Alexius Medical Center in Hoffman Estates.

The expansion and merger cycle also transformed Sherman Hospital in Elgin. Sherman moved from its longtime downtown Elgin location in 2009 into a sparkling new $310 million facility with 225 beds. The structure features single-patient rooms, healing gardens and geothermal energy that heats and cools the building using water from a man-made lake.

This past June, Downers Grove-based Advocate Health Care acquired Sherman, adding to its network of 12 hospitals.

Population growth in Kane County prompted Sherman to build the new hospital, said Linda Deering, president of the hospital.

“Patients first and foremost want high quality, safe care,” she said. “The features (of the new hospital) have been proven to reduce errors and infections while adding privacy, security and service …”

The Advocate acquisition will allow Sherman to adapt to the new patient treatment model under the new health law, Deering said.
“Advocate is a national leader in redesigning clinical care models for the future,” Deering said. “(It) will allow us to provide better health care value — meaning better health outcomes at lower costs for more people.”

Advocate is also using its resources to pour $247 million into an expansion of Advocate Good Shepherd Hospital in Barrington. The project, which is expected to be complete in 2016, will feature a total of 176 private rooms, eight modern operating rooms, an 18-bed intensive care unit, upgraded cardiovascular and pulmonary testing, enhanced clinical services and improved ambulatory and radiology care.

The marketplace, which includes affluent portions of Cook, Lake and McHenry counties, demanded the upgrade, said Karen Lambert, president of Advocate Good Shepherd.

“Patients have come to expect private rooms and understand how critical privacy is in the healing process,” Lambert said. “Patients have also come to expect the advanced technology that will enhance their care.”

Lambert said the project also meshes with the goals of the new health care law.

“The Affordable Care Act’s goal is to improve access to high quality care for more Americans and to make health care more affordable,” she said. “Providing the safest and highest quality care to our patients will continue to be our goal.”