Westlake Hospital’s bankruptcy filing raises questions about new health care bill

The bitter fight to keep open Westlake Hospital has some questioning if Illinois will see more closures end up in court now that state regulators have gained more control over health care facilities.

Local politicians and community groups have opposed Pipeline Health at every turn since the company bought Westlake, Weiss Memorial Hospital and West Suburban Medical Center at the end of January.

The new owners promised to keep services open at Westlake in Melrose Park for least two years in documents submitted to the Illinois Health Facilities and Service Review Board. But weeks after Pipeline assumed ownership it announced plans to close Westlake.

The review board approved the closure in April, but a Cook County judge in early May ordered Westlake to stay open while that approval was reviewed. Then the hospital operator filed bankruptcy Aug. 6 in Delaware.

On Tuesday, Westlake’s Chapter 7 bankruptcy was transferred to Chicago. And on Wednesday, a Cook County judge is expected to rule if Westlake operators violated her order to keep the hospital open.

Until a few weeks ago, hospital closures were generally straightforward in Illinois. Facility operators applied for closure with state regulators, and as long as all of the necessary documents were in order, the board approved the closure.

The battle over Westlake changed that.

State Rep. Kathleen Willis, D-Northlake, whose district includes Westlake Hospital, helped lead an effort to change how hospital closures are handled. Gov. J.B. Pritzker signed the changes into law in July.

Manny Ramos/Sun-Times

Under the new rules, hospital owners can only close one department every six months, and the state’s review board can hold off voting on closure applications for up to six months if pending litigation accuses the applicants of fraudulent behavior.

Ari Scharg of Edelson PC, Melrose Park’s attorney, recognizes it is generally hard to force someone to keep running a business they no longer want. But when the business is a hospital, Scharg said, and the owners make specific promises to keep the facility open and to continue providing charity care for at least two years, it’s a different story.

People’s lives are on the line, Scharg said, and there has to be some oversight to make sure everything is accounted for.

While the rule changes won’t help Westlake, Willis said she hopes it will help communities facing hospital closures in the future.

The Westlake bankruptcy filing raises a question about who really approves hospital closures in Illinois: state regulators or the federal bankruptcy court?

“Pipeline filing for bankruptcy in Delaware is a loophole in the system,” Willis said. “Pipeline is looking for anything possible to close this hospital.”

Still, Willis doesn’t think this will encourage other hospital operators to do the same as a means of bypassing state regulators.

“We worked with the Illinois Health and Hospital Association on this bill to make sure it was fair for hospital owners, and most owners generally care for the best possible outcomes for the communities. Pipeline is the exception,” Willis said.

Courtney Avery, administrator of the Illinois Health Facilities and Services Review Board, said hospitals will need to the review board’s approval to close a facility. But Avery acknowledged she doesn’t see the review board voting to keep a hospital open if a bankruptcy judge grants liquidation.

“The discussion about access to health care at the national level has led political debates recently, but a suburb at the edge of Cook County is actually on the frontline of what it means to have that access threatened by a company driven by profit,” Scharg said.

“We are talking about 40,000 people who are going to lose their access to critical health care every year if this hospital closes.”

Manny Ramos is a corps member of Report for America, a not-for-profit journalism program that aims to bolster Sun-Times coverage of Chicago’s South Side and West Side.