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West Sub's new owner proposes Westlake closure

If state OKs Pipeline Health request, West Sub may absorb some in-patient services, employees

February 19th, 2019 3:27 PM

If Pipeline Health gets its way, two nearby hospitals to consolidate. | Alexa Rogals/Staff Photographer

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By Michael Romain

Staff Reporter

West Suburban Medical Center in Oak Park has a significant role to play in the recent decision made by its new owner, Los Angeles-based Pipeline Health, to close Westlake Hospital in Melrose Park. 

Representatives with Pipeline Health LLC and TWG Partners — the two for-profit entities that purchased Westlake Hospital in January before announcing over the weekend plans to close the hospital — said in a statement released Feb. 16 that they plan to file an application next week with the Illinois Health Facilities and Services Review Board to close the 230-bed Melrose Park hospital. 

If the application is approved, the closure could be finalized by the second quarter of this year, officials said. Westlake employs around 670 people, 200 of them "on an as-needed basis," officials added.

Pipeline Health officials said that they'll invite qualified Westlake employees to apply for positions at West Suburban or Weiss Memorial Hospital in Chicago, and that a community shuttle between Melrose Park and West Suburban in Oak Park "is also in the works." 

They also said Westlake's in-patient services, including gynecology, intensive care and obstetrics, among others, will be consolidated with West Suburban. 

Pipeline Health and TWG Partners purchased Westlake, West Suburban and Weiss from Tenet Healthcare for $70 million in January. 

In a Feb. 17 Chicago Tribune article, Dr. Eric Whitaker, the founder of TWG Partners and vice president of Pipeline Health who is also a close friend of former president Barack Obama, told reporters that closing Westlake will allow West Suburban and Weiss to remain financially sustainable.

He added that Westlake lost $9 million in 2017 and was set to lose even more this year. Whitaker explained to Tribune reporters that he told local leaders that "all options were on the table," even though the new owners did not originally intend to close any of the three hospitals. 

"As we looked at the financials, the losses had accelerated tremendously and it was beyond what we had projected," Whitaker told the Tribune. "To the extent that we would have to pour a lot of capital into Westlake, it really would have endangered the other two hospitals we had as part of the purchase."

The announcement still incensed local lawmakers, such as state Rep. Emanuel "Chris" Welch (D-7th), who represents constituents in Westlake's and West Suburban's service areas. 

During a press conference outside of Westlake on Feb. 18, Welch, who is also a Westlake Hospital trustee, said that he was informed of Westlake's closing on Friday from a voicemail message left by Whitaker.

"Just like I told Eric Whitaker on Friday — we are not going to let them close these doors," Welch said.

Welch recalled that "every single time" Pipeline Health officials spoke with hospital trustees during the purchase process, "they told us they wanted this hospital to invest in it, not close it. They said they believed in community, that they believe in the commission of community hospitals like Westlake."

Welch added that he contacted the Attorney General's office on Friday "and asked them to investigate whether [Pipeline] intentionally misrepresented and committed fraud" during the process of purchasing the three hospitals. He said that he's already fielded inquiries from other investors looking into the possibility of purchasing Westlake from Pipeline Health.

Before acquiring the hospitals, Pipeline Health had to file papers with the Illinois Health Facilities and Services Review Board, which "approves or disapproves applications for construction or expansion of health care facilities to avoid unnecessary duplication of such facilities and promotes development of facilities in areas where needed," according to its website.

Pipeline Health officials said that they plan to file an application next week with the Review Board to close Westlake. If the application is approved, the closure could be finalized by the second quarter of this year.

Earlier this month, when he was asked what attracted him to Pipeline, Whitaker told Crain's that Westlake "really believed in putting community first."

Whitaker added that the hospital believes "in quality care. They believe in being the lowest cost provider. And so all of these things I think are important in hospitals because I think there are one-off community hospitals in danger all over this country."

And in January, Jim Edwards, the CEO of Pipeline and a partial owner of the company, told the Chicago Tribune that he wasn't "put out by the fact that these hospitals have some issues and problems from a financial perspective. 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."

CONTACT: michael@oakpark.com