So-called “safety net” hospitals in Illinois are ailing. The spreading sickness is putting those in underserved communities in healthcare jeopardy.
Things are so bad at Waukegan’s Vista Medical Center East that the California-based private corporation that owns the beleaguered hospital wants to sell a parking lot on the southwest corner of Sheridan Road and Glen Flora Avenue. That is in order to pay a delinquent property tax bill of some $2.1 million and climbing.
The city hospital isn’t the only one in Illinois facing financial troubles. West Suburban Medical Center in Oak Park, which served tens of thousands of patients annually, closed late last month.
State auditors found that West Suburban Medical Center, which employed more than 700 workers prior to closure, had no cash reserves, with operating expenses of $10 million per month and significant debt. So far, Illinois taxpayers have spent $30 million on loans to the hospital.
The facility also owes more than $50 million in tax debt to the state, according to the Illinois Department of Healthcare and Family Services, along with payments to vendors. Staff at the hospital in the western suburb have urged state officials to reopen the hospital with emergency funding and appoint a new management team.
Another Cook County facility, the 214-bed Franciscan Health Olympia Fields Hospital, was recently sold to another California for-profit healthcare corporation after being in financial distress for years. According to one report, the hospital lost more than $47 million in 2024.
Previously, Mercy Hospital on Chicago’s Near South Side went out of business before being purchased for $1. It is now known as Insight Hospital and Medical Center.
While for-profit healthcare corporations say they specialize in saving struggling facilities by reducing inefficiencies and overhead, they usually end up reducing services that at-risk communities need. Prime Healthcare, the fourth-largest for-profit health system in the U.S., now owns a number of Illinois hospitals.
At its state facilities, Prime has suspended inpatient pediatric care at St. Joseph Medical Center in Joliet, suspended obstetrical services at St. Mary’s Hospital in Kankakee and lost its Level II trauma center designation at Mercy Medical Center in Aurora, according to several reports.
Those cuts may sound familiar to Waukeganites who faced similar challenges — like the shuttering of obstetrics and neonatal departments– at Vista Medical. Even with service reductions, Vista’s parent, American Healthcare Systems, continues to owe property taxes from 2023 and 2024.
On top of that, it owes more than $360,000 in back water usage fees to the city of Waukegan. ComEd sued the 228-bed hospital last year for more than $800,000 in unpaid electric bills. The hospital has missed paying employees in two instances.
Floundering financially, county tax collectors must wonder if Vista can pay its 2025 tax bill. Those bills for county taxpayers should be out soon, with the first installment due in early June.
Unsure who would want to buy an unneeded parking lot across from the hospital in the middle of a mainly residential neighborhood on Waukegan’s Near North Side, but Vista is hoping to find out. Long-time residents may recall that there once were three single-family homes along Glen Flora Avenue and a cleaners before they were torn down for parking spaces.
Some of the hospital’s delinquent payments were scooped up by firms that purchase for investment past-due tax bills. On tax bills owed to the county, interest accumulates at 12% annually.
Speaking of tax bills, Illinois taxpayers have seen healthcare costs through Medicaid jump 7.48% to $35.94 billion in fiscal year 2025, according to a recent state report. Medicaid payments are the state’s largest budget expenditure category.
What should also worry public policy and healthcare professionals is the lack of any Illinois law stopping hospitals from closing abruptly without notice to the state, or lopping off needed community services. At least on the business side of the ledger, the state requires corporations to warn labor officials when layoffs or company closures are imminent.
There are bills in the legislative hopper to address this notification oversight, but it is doubtful lawmakers will take up the measure before the legislature adjourns at the end of next month, considering lawmakers are focused on property tax relief and keeping a Chicago Bears stadium in Illinois.
Meanwhile, Waukegan officials and others in northeast county communities are concerned over the future of Vista Medical. Mayor Sam Cunningham voiced what many echo in an April 2 News-Sun front-page story by Steve Sadin: “The region deserves a health-care system that is stable, responsive and fully committed to meeting the needs of our families.”
Solutions are few without an influx of cash to stem the tide of rising red ink at the hospital, which has been a part of the city since the 1920s. Selling a parking lot is just a stopgap measure.
Charles Selle is a former News-Sun reporter, political editor and editor. sellenews@gmail.com. X @sellenews.
