Sunday, May 5, 2019 || By Michael Romain || @maywoodnews || Updated: 5/7/19
The real-life drama of Pipeline Health’s attempt to close Westlake Hospital in Melrose Park has moved swiftly and taken many turns. That’s why we’ve provided a timeline of the action.
Sept. 6, 2018 | Pipeline Health and TWG Partners — through their respective principals, Nicholas Orzano and Dr. Eric Whitaker — submit their application for ownership of Westlake Hospital to the Illinois Health Facilities and Service Review Board.
In their change of ownership application, Pipeline and TWG state that they will continue Westlake Hospital’s Charity Care Policy “for no less than two years following the consummation of the transaction” and that the change of ownership “will result in no changes to the scope of services offered at Westlake.”
Oct. 22, 2018 | Melrose Park’s Board of Trustees vote to approve a request from Pipeline that they be granted the rights outlined in a Redevelopment Agreement that was first entered into in 2010 to benefit the hospital’s then-owner Vanguard Health Systems to help pay for capital improvements at Westlake. The RDA was later assigned to Tenet Healthcare Corporation, Westlake’s most recent owner before Pipeline.
The RDA allows for Pipeline to receive 50 percent of the property tax revenue generated from the Chicago Avenue/Superior Street TIF District that was created to provide financial support necessary to keep Westlake open. Melrose Park Mayor Ron Serpico and the village board consent to reassigning the RDA to Pipeline only if they promise not to close Westlake Hospital.
Nov. 11, 2018 | The review board grants Pipeline an exemption from the general rule that any individual or entity seeking to purchase, build or modify a hospital in Illinois must secure a permit. In order to qualify for the exemption, Pipeline had to “affirm that they will not impose a more restrictive charity care policy at the subject hospital for two years.”
Based on Pipeline’s promises not to close Westlake, Melrose Park officials waived the village’s right to oppose the company’s change of ownership application and village officials did not call for a public hearing on the matter.
A screenshot of Pipeline’s change of ownership exemption application. | File
Dec. 18, 2018 | The village of Melrose Park Board of Trustees unanimously cancel the redevelopment agreement, which Pipeline officials said brought in around $500,000 to Westlake each year.
Jan. 29, 2019 | The sale of Westlake is completed. Tenet Healthcare Corp. announces the sale of its last three hospitals in the Chicago area — West Suburban Medical Center in Oak Park, Ill., Louis A. Weiss Memorial Hospital in Chicago and Westlake Hospital in Melrose Park — to California-based Pipeline Health. Pipeline acquires the hospitals for $70 million.
At the time of purchase, Pipeline’s CEO Jim Edwards and Dr. Eric Whitaker, Pipeline’s principal and vice chair, tell multiple media outlets that they plan to continue operating the hospitals.
“We’re not put out by the fact that these hospitals have some issues and problems from a financial perspectives … We feel strongly with our resources, our finances, our experience we can come in and make a difference, and, for lack of a better way to put it, save these hospitals,” Pipeline CEO Jim Edwards is quoted in a Chicago Tribune article published Jan. 29.
Feb. 15, 2019 | Crain’s Chicago Business publishes an article with the news that Pipeline plans on closing Westlake. State Rep. Emanuel “Chris” Welch (7th) says that Eric Whitaker told him about Pipeline’s plans in a voicemail.
Whitaker tells the Chicago Tribune, in an article published on Feb. 17, that Westlake’s financial losses “had accelerated tremendously” and were “beyond what we had projected.” He added that pouring a lot of money into Westlake would have endangered Weiss and West Suburban.
Feb. 18, 2019 | Community leaders, local lawmakers and hospital employees gather in front of Westlake to protest the recent decision by the hospital’s new owner to close the institution.
Community leaders, local elected officials and Westlake employees gather in Melrose Park on Feb. 18 to demonstrate against Pipeline’s plans to close the hospital. | File
Feb. 21, 2019 | Pipeline files an application for discontinuance with the review board. In the application, Pipeline officials state that, although they plan to discontinue all of Westlake’s hospital services, they plan to continue operating the medical building in Melrose Park that houses PCC Community Wellness, which would provide outpatient services to the community.
They also commit to invest $2.5 million over five years for “enhanced ambulatory and outpatient care in Melrose Park” while they intend to consolidate Westlake’s OB/GYN, medical/surgical, intensive care, outpatient and emergency care patients with West Suburban.
In addition, “qualified members of Westlake’s medical staff” who aren’t already members of West Suburban “will be given priority consideration” for joining the Oak Park hospital, Pipeline officials state in their application.
March 7, 2019 | The village of Melrose Park files a lawsuit in the Cook County Circuit Court’s Chancery Division, accusing Pipeline Health, along with other entities, of “committing fraud and civil conspiracy in connection with their purchase of Westlake Hospital,” according to attorney Ari Scharg, of Edelson PC, the law firm representing the village.
That same day, State Rep. Kathleen Willis (88th), whose district includes Westlake, files House Bill 123, which would give Gov. J.B. Pritzker the authority to overrule the state review board’s decision. Rep. Welch is a co-sponsor.
March 8, 2019 | At an Illinois House of Representatives’ Appropriations-Human Services Committee hearing in Chicago, Westlake employees, including department heads and doctors, say that closing the hospital could mean higher fatality rates in the Proviso Township area.
March 21, 2019 | HB 123 passes the House Appropriations-Human Services Committee by a party line vote of 12 to 6.
April 9, 2019 | A judge upholds a restraining order filed by Melrose Park against Pipeline in order to keep Pipeline from closing Westlake Hospital before the Illinois Health Facilities and Services Review Board makes a decision on the proposed closure on April 30. The court order requires Pipeline to keep Westlake open until at least May 1. Pipeline appeals the decision.
That same day, Pipeline announces that they temporarily suspended service at Westlake “due to concerns about its ability to continue maintaining a safe environment for patient care due primarily to declining staff rates.”
Hospital employees say that Pipeline has started moving equipment and furniture to West Suburban in Oak Park and has told them to stop admitting new patients and to transfer existing ones.
Dr. Raymond McDonald, a specialist in geriatric medicine at Westlake, speaks with reporters outside of court in Chicago on April 11, after attorneys with the village of Melrose Park and Pipeline battled over a temporary restraining order. | File
April 11, 2019 | HB 123 passes the full Illinois House on a 69-35 vote. In response to bipartisan concerns that the bill gives the governor too much power, Willis vows to change the legislation in the future.
April 16, 2019 | A judge finds Pipeline in contempt of court after they apparently violated the restraining order that prohibited them from closing the Melrose Park hospital before the state made a decision on the company’s hospital closure application.
Pipeline has until 9 a.m. on April 18 to reopen every Westlake department except for the bariatric unit. If Pipeline fails to restore those services, they can face a $200,000 a day fine.
During the contempt hearing, Pipeline CEO Jim Edwards admits that he made a decision to close Westlake Hospital based on his analysis of the hospital’s financial status in December of 2018 — before Pipeline purchased Westlake. The admission bolsters the argument of those who claim that Pipeline lied about its real intentions for the hospital during the purchase process.
April 17, 2019 | In a press release, Pipeline offers to transfer Westlake to Melrose Park, which “would allow the village to operate the facility or seek a new buyer, even though patient demand has been falling at Westlake for years,” Pipeline states. “On average, Westlake Hospital is only 30 percent full, and inpatient visits in 2018 dropped 15 percent to nearly 4,100 visits, down from approximately 4,800 the year prior.”
The village rejects the offer. In response, Melrose Park spokesman Andrew Mack says the village has not claimed that it can operate a hospital and that Melrose Park “would be more than willing to try and help find another buyer if that’s what needs to happen at this point.”
April 18, 2019 | The Cook County Circuit Court of Appeals rules 3-0 in favor of reversing the temporary restraining order. Judges argue that Melrose Park did not have standing to file the order.
In a statement released the day of the decision, a Pipeline spokesman says that the appellate court’s ruling could “serve a potential fatal blow” to the lawsuit that the village of Melrose Park filed against Pipeline in March.
Hours after the Circuit Court’s decision, the Illinois Supreme Court issues a stay of the lower court’s ruling, meaning that the temporary restraining order remains in place.
April 22, 2019 | Cook County State’s Attorney Kim Foxx joins Melrose Park’s case against Pipeline.
April 26, 2019 | Ari Scharg, the attorney for Melrose Park, writes to the review board, urging members to defer their decision on Pipeline’s application to discontinue services at Westlake until the lawsuit is resolved and “a process can be put in place that allows for the orderly and equitable transition of Westlake to a new owner.”
April 30, 2019 | The Illinois Health Facilities and Services Review Board votes 7-0 to allow Pipeline Health to close Westlake. Pipeline plans to close the hospital by May 3.
May 3, 2019 | A Cook County Circuit Court judge enters a temporary restraining order prohibiting Pipeline Health from closing at least until 5 p.m. on May 7. VFP
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