The growing reach of Northwestern Memorial Hospital — It's not your parents' NMH: 10 things to know

For a long time, Northwestern Memorial Hospital was viewed as the epicenter of the city for white-collar healthcare. An employer or health plan couldn't offer a plan without NMH in it. Like the Michael Reese Hospital and Medical Center in Chicago, now defunct, a whole generation of children was born at NMH. It was the place for the city's affluent and elite, and it was wholly focused on being a leading player, if not the lead player, in the city itself. It has been a Gold Coast institution.

Today, NMH is on the move. Under the leadership of president and CEO Dean Harrison, who is growth-oriented and replaced the leadership of much heralded leader Gary Mecklenburg, NMH is attacking aggressively to the west, northwest and north of the city. In some ways it has followed its constituency to the suburbs. In other ways, it is moving with its physicians.

In either event, one thing is certain: This is no longer your parents' NMH. Its broad and direct evolution in strategy is leading to increased competition with other Chicago-based systems such as NorthShore University HealthSystem in the north and Advocate Health Care primarily on the west and northwest. The game is afoot, and it's exciting to watch.  

Here are 10 things to know about NMH's evolution.  

1. Northwestern Memorial Hospital is part of Northwestern Memorial HealthCare, which falls under the umbrella of Northwestern Medicine with Northwestern University Feinberg School of Medicine. Northwestern Memorial HealthCare is the parent of Northwestern Memorial Hospital, Northwestern Lake Forest Hospital, Northwestern Memorial Foundation and Northwestern Medical Group.

2. Northwestern Memorial is based in Chicago's Streeterville neighborhood. The 25-acre campus is short walk from the lakefront and near the affluent Gold Coast residential neighborhood and Magnificent Mile shopping district on Michigan Avenue. Streeterville has experienced residential and office growth during the past decade, with the residential population increasing by 37 percent from 2000 to 2008.

3. One of the hospital's first significant growth spurts was spatial. On May 1, 1999, Northwestern Memorial opened its 2-million-square-foot, 22-story, $580 million medical center, where it still resides today.

4. Within five years, Northwestern Memorial completed two major transactions and announced plans for a third. In 2010, the system acquired Lake Forest Hospital, a community hospital in the northern suburbs of Chicago that was subsequently renamed Northwestern Lake Forest Hospital. Talks regarding this acquisition lasted nearly two years. Northwestern Memorial's footprint in Lake County through this acquisition helped expand its reach and solidify its presence throughout the greater Chicagoland area. Under terms of the contract, Northwestern agreed to build a new hospital, and plans for the new $378 million facility were approved in June 2014. Thomas J McAfee, president of Northwestern Lake Forest Hospital, has said the hospital plans to serve its first patient in the new facility in 2017.

5. The second major deal took place when Northwestern Memorial merged with Winfield, Ill.-based Cadence Health, a two-hospital system based approximately 35 miles west of Chicago, in September 2014. Following the merger, Northwestern Memorial's operating margin rose from 6.7 percent during the first quarter of 2014 to 7.1 percent during the first quarter of 2015. Additionally, Northwestern's balance sheet indicated a $1.78 billion gain for the first quarter 2015 after including Cadence's assets.

6. Most recently, KishHealth System in DeKalb, Ill., signed a definitive agreement in August to join Northwestern Memorial. Under the agreement, which is still subject to regulatory approval, KishHealth will add two hospitals to Northwestern's growing family of facilities, bringing the total number of locations to 90. Though KishHealth's annual revenue of $221.7 million is just 6 percent of Northwestern's $3.71 billion, the agreement extends Northwestern's reach to 70 miles west of the city and more than 30 miles north, according to Crain's Chicago Business.

7. Hospitals and health systems aside, Northwestern Memorial also acquired Northwestern Medical Faculty Foundation in 2013 for $350 million. The practice is 900 physicians strong and was previously affiliated with Northwestern University. Prior to the acquisition, the health system's affiliated medical group — Northwestern Memorial Physicians Group — had 122 physicians. NMFF was the second-largest physician group in Chicago before the deal. As part of the agreement, it changed its name to Northwestern Medical Group.

8. Northwestern is moving boldly into the world of outpatient care, as the system opened an ambulatory surgery center in October 2014. Physicians at the 25-story, $330 million outpatient surgery center are expected to serve more than 600,000 patients in its first year on top of the 1.6 million to 1.8 million outpatient visitors they already treat. Hospital officials expect the surgery center to treat 1 million additional patients each year within five years. What's more, the surgery center is expected to create more than 900 jobs by 2018.

9. With all its growth, Northwestern Memorial is a reckoning force in Chicago's healthcare landscape, though it still isn't the biggest health system. That distinction remains with Downers Grove, Ill.-based Advocate, whose pending merger with Evanston, Ill.-based NorthShore University Health System will create a 16-hospital system. This will not only be the largest health system in Chicago, but the largest in Illinois and the 11th largest nonprofit system in the country. Chicago-based Presence Health is the second largest system in the state, with 11 hospitals. Comparatively, Northwestern currently has four hospitals in its system and will bump that tally up to six if the deal with KishHealth is approved.

10. Northwestern Memorial is often regarded as a top referral hospital in the Midwest. According to June data from the American Hospital Directory, Northwestern Memorial physicians performed an estimated 17,400 inpatient surgeries and 34,600 outpatient surgeries. Additionally, they conducted 462,200 outpatient visits, and saw 29,200 emergency room visit that turned into admits and 37,100 emergency room visits that did not lead to an admission. However, in 2012, the system laid off 230 employees to reduce its cost structure, partly influenced by lower patient volumes, according to a Chicago Tribune report.

More articles on hospital growth:

South Florida hospitals open satellite emergency rooms
Novant, Duke University Health System explore clinical collaborations
5 physician groups form collaborative in Ohio

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