Peoria, Ill.-based OSF HealthCare has withdrawn both a permit application to replace its OSF St. Elizabeth Ottawa (Ill.) hospital and an application to discontinue services at the facility.
OSF HealthCare cited “significant shifts” in regulatory requirements, regional healthcare needs and construction costs for its decision to withdraw the applications, according to a Dec. 8 news release shared with Becker’s. The health system deferred state review of the project three times, with the existing deferral set to expire on March 31, 2026.
“Too much has changed since the initial filing for us to responsibly move forward without re-evaluating the project,” Bob Sehring, CEO of OSF HealthCare, said in the release. “We need to take a fresh and thoughtful look at the services needed in the region, what size and type of facility will best support patients, and how we can ensure long-term sustainability.”
OSF HealthCare’s original certificate-of-need application in early 2024 aimed to replace OSF St. Elizabeth with a new facility in Ottawa. The plan was to build a 26-bed inpatient behavioral health unit, 12 medical and surgical beds, a surgery suite, emergency services, diagnostic imaging and outpatient services.
During a Nov. 18, 2025, state review board meeting, Mr. Sehring highlighted the importance of reassessing the cost, scope and size of a future facility. The updated planning process is expected to take 18 months or more, extending beyond the existing deferral period, and will prompt the withdrawal and eventual resubmission of a new permit application.
The health system said it will also seek community input across the region for the new plan.
OSF plans to also review utilization data following its recent consolidation of inpatient obstetrics and ICU services at OSF St. Elizabeth in Peru, along with the opening of all 45 medical-surgical beds there. Mr. Sehring said in a Dec. 9 statement shared with Becker’s that OSF leadership will closely monitor healthcare service utilization over the next 12 months in LaSalle County, Ill., which will involve a detailed analysis of utilization trends, existing and expected healthcare needs and broader factors that influence community access and outcomes.
“Revised capital and operating cost projections, new factors such as the impact of the One Big Beautiful Bill Act, financial impacts of Medicare and growth of the regional hub clinical infrastructure in Peru to support the regional model of care will directly shape the financial feasibility of a new facility design by reinforcing our commitment to being diligent stewards of both capital and human resources,” Mr. Sehring said.
OSF St. Elizabeth will continue to offer emergency services, imaging, inpatient and outpatient behavioral health, medical-surgical beds and other outpatient services, the release said.
