Chicago’s Mercy Hospital and Medical Center, the oldest chartered hospital in the city, has had financial problems since the 1990s, culminating in a bankruptcy filing Wednesday, Bloomberg News reported. Its story is emblematic of the challenges facing its patients and a large swathe of U.S. hospitals also struggling to survive. Mercy, a fixture on Chicago’s South Side, takes on sicker people than some of its competitors, and many of its patients lack private insurance that reimburses at higher rates. It’s also suffered as more treatment moves outside hospitals. Mercy sought court protection after Illinois health officials rejected a plan to close the hospital and replace it with an outpatient center. Even before the pandemic slammed hospitals, forcing them to pay up for protective equipment and cancel many profitable elective procedures, the divide between centers like Mercy and richer facilities was widening. “Hospitals in surrounding areas have made investments in outpatient services, which, along with new and updated facilities, allowed them to dominate positive consumer opinions in the market and siphon off commercial patients, Medicare patients and outpatients,” Chief Executive Officer Carol Garikes Schneider, who’s run the hospital since 2013, said in a court filing on Thursday. Felicia Gerber Perlman, who co-heads the bankruptcy and restructuring group at law firm McDermott Will & Emery in Chicago and isn’t involved in the case, said Mercy’s bankruptcy could herald a wave of similar filings among providers in lower-income, urban areas. Those hospitals share some challenges with rural facilities that have seen revenues and patient bases shrink. Mercy’s patients suffer “disproportionately” from chronic diseases that would benefit from early detection and monitoring in an outpatient setting, Schneider said in the filing that detailed years-long efforts to save the institution.
