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Westlake Hospital files for bankruptcy

The Melrose Park hospital is about 80% empty and losing nearly $3 million a month, the owners say.

Westlake Hospital
Westlake Hospital has filed for Chapter 7 bankruptcy.
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Westlake Hospital filed for bankruptcy Tuesday morning citing economic and industry hardship caused by health care policy implemented at the state level.

Owners of the hospital at 1225 W. Lake St. in Melrose Park say it is losing nearly $3 million a month and no buyer has emerged for the facility that is about 80% empty.

The owners also blame the $4 million in Medicaid funding lost through the Illinois Hospital Assessment Program in 2018. They also say the village of Melrose Park withdrawing $500,000 for Westlake’s redevelopment plan has stifled growth.

SRC Hospital Investment II LLC requested a Chapter 7 bankruptcy trustee to oversee the hospital.

“We do not relish filing bankruptcy petitions for the hospital,” CEO Jim Edwards said in a statement. “Ultimately, it is the decision of the trustee whether he wants to continue operating the hospital beyond the initial period.”

If the trustee chooses to close Westlake, Edwards said, current patients will be transferred to one of the nearby hospitals such as Gottlieb Memorial Hospital in Melrose Park, Loyola Medical Center in Maywood or West Suburban Medical Center in Oak Park.

State Rep. Emanuel “Chris” Welch, Westlake Hospital trustee, said this is the latest example of how the hospital owners are putting profit over people.

“Instead of fulfilling promises to assist Westlake, as Pipeline’s CEO Jim Edwards declared earlier this year, the for-profit company turned its back on the hospital and the largely black and brown communities that rely on it,” Welch said in a statement. “We deserve better than this, and I will not stand by and allow a corporation to gamble with the health and well-being of our community for the sake of profit.”

Tenet Healthcare sold Westlake last year as part of a packaged deal to Pipeline Health and TWG Partners — a firm founded by Eric Whitaker — that also included Weiss Memorial Hospital, 4646 N. Marine Drive, and West Suburban Medical Center, 3 Erie Ct. in Oak Park.

Whitaker, a close friend of former President Barack Obama, also served as the associate dean at the University of Chicago and as director of the Illinois Department of Public Health.

The $70 million deal was finalized in January, and within a month of acquiring the three hospitals — and after promising the community it would keep services at Westlake operational — Pipeline announced its plans to close the facility for good.

The announcement of the closure kicked off a bitter legal battle between the village and the owners of Westlake. Then, at the end of April, the Illinois Health Facilities and Services Review Board voted 7-to-0 to approve Pipeline’s application to close the hospital. This forced Gov. J.B. Pritzker to step in and oust two of his then-new board appointees.

Because of the ouster, a Cook County judge ruled that Westlake must stay open until a court reviewed the board’s decision.

“We are going to do everything we can to keep (Pipeline) from closing the hospital and we want to hold Jim Edwards and Eric Whitaker accountable,” Ari Scharg, an attorney for the Melrose Park said

The village is now planning a move to disrupt the bankruptcy but couldn’t give specifics on what it may be.

“The village is committed to aggressively opposing pipeline’s move, and we are going to continue on to fight and preserve access to health care in the community,” Scharg said. “Really at the end of the day, this is what private equity firms do. They hide behind shell companies and are just looking to profit off the backs of the community.”

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.