State board reverses May 2021 ruling, approves $61 million hospital for Quincy Medical Group

QUINCY — The Illinois Health Facilities and Services Review Board approved Quincy Medical Group’s certificate of need applications for both the QMG Hospital and QMG Birth Center during its meeting on Tuesday. 

The decision reversed a May 26, 2021 ruling when the board cited the project would create an unnecessary duplication of services. QMG appealed, submitting more documentation two months after the board issued its intent to deny.

The decision now allows Quincy Medical Group to establish a small format hospital in Quincy. The cost of the project is $61,142,058, and the expected completion date is Sept. 30, 2025. Construction on the hospital, and the three-bed birthing center, now can begin at the Quincy Town Center. which already is home to the QMG Surgery Center and Cancer Institute. 

“We are thrilled with the board’s decisions today,” QMG Chief Executive Officer Carol Brockmiller said in a press release. “At QMG, we are doing really good things for all the right reasons and trying hard to serve the people of Quincy, Adams County, West-Central Illinois and the tri-states.

“We are here, first and foremost, for our patients. That focus hasn’t changed in our 85-year history. In fact, it’s driven us to do better and ensure that we provide quality healthcare now and for the next generation of patients. Since we first announced our plans for the QMG Hospital and QMG Birth Center, the gracious actions of support from our patients, local residents and community partners have helped our concepts become reality in our community.” 

QMG’s small-format hospital will be comprised of:

• 25 med-surg beds; 
• 3 labor, delivery, recovery and postpartum or LDRP rooms;
• an emergency department with 10 bays; 
• a C-section suite; 
• 3 operating rooms;
• 1 procedure room; 
• a post-anesthesia care unit;
• a laboratory;
• A pharmacy; and 
• An imaging department. 

Three of the medical-surgical beds will serve as negative pressure rooms to aid in future infectious disease outbreaks. 

The QMG Birth Center will become the first birth center in the Quincy region and the sixth in Illinois. 

“Local patients deserve affordable, quality healthcare,” Dr. Todd Petty, QMG Surgeon and Board Chair said in a press release. “Today’s decision allows us the opportunity to give them that.” 

Blessing Health System officials were urging the board to block QMG’s plan, arguing the proposed hospital would siphon off profitable surgeries and privately insured patients that keep Blessing afloat financially. Blessing has said it will be at risk of losing nearly $15 million annually in federal funding given to isolated community hospitals.

“These projects do not represent innovation,” Maureen Kahn, president and CEO of Blessing Health System, said. “They are designed to redirect largely commercially insured and lower acuity patients away from Blessing. Such cherry-picking is not innovation; it is predatory. Each project would irreparably harm Blessing, which is the designated sole community hospital and lead safety net provider in the region. Our current overall inpatient payer mix is 20 percent commercially insured and 75 percent Medicare Medicaid and charity care. Our obstetrics inpatient unit is now 38 percent Medicaid.”

QMG joined forces in September with Downers Grove-based Duly Health & Care, formerly known as DuPage Medical Group. Area Management, a Los Angeles-based private-equity firm, backs Duly.

“QMG is no longer the community-based physician group we have collaborated with for years,” Kahn said. “QMG has not been adequately forthcoming about its new relationship, and that lack of transparency is what lead me to rescind the transfer agreement for the proposed Birth Center, which Blessing signed in good faith, prior to QMG’s change of control. I am appropriately concerned about the implications for delivery of healthcare in our rural corner of the state.”

Cook County Commissioner Bridget Gainer testified that, according to the Private Equity Stakeholder Accountability Project, Ares Management added $650 million in debt to Duly last year and proceeded to take back $209 million dollars in dividend distribution.

“That’s the opposite of charity,” Gainer said. “Companies like Ares are piling debt on medical practices in our communities. Like a ponzi scheme, the players at the top make the money, and the rest of us shoulder the burden of incredible debt.”

Former Quincy mayor Chuck Scholz also testified, asking the review board to deny the application. He said most nurses for this region are trained by Blessing Health System in conjunction with local colleges. He said 65 percent of graduates typically remain in this region, but now 50 percent of May 2022 graduates are choosing to accept positions in metropolitan areas.

“If this trend continues, we will not have enough nurses to meet the demand for one hospital, much less two,” Scholz testified.

He also noted Quincy once had two hospitals — Blessing and St. Mary — when he was mayor. The city approved a $42 million bond issue in 1993 to consolidate the two hospitals.

“Quincy simply could not sustain two viable hospitals,” Scholz said. “This was a long and well thought out process to eliminate unnecessary duplication of services and promote growth and sustainability for medical care in this community. Blessing was then recognized by Medicare as a sole community hospital, thereby assuring financial stability so Blessing could grow into an innovative, high-quality provider for the tri-state region.”

The disappointment in the center’s approval was reflected in a statement issued by Blessing Health System simply attributed to “its leadership.”

“We are deeply disappointed in the board’s decision to ignore its own rules and approve this unnecessary QMG Hospital and Birthing Center,” the statement said. “Throughout this process, our unrivaled commitment to care for our communities and patients has never wavered. Unfortunately, the state board’s approval of both the QMG Hospital and Birthing Center will put these vital services at risk, including the impending loss of the only sole community hospital status in the region. 

“As we work to protect these services for our community, we are reviewing all of our options.”