West Sub's new owner, under fire, pledges loyalty

Pipeline says despite closure of Westlake Hospital, they're committed to West Suburban

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By Michael Romain

Staff Reporter

Some changes are headed to West Suburban Medical Center, as the hospital's new owner works to close another hospital it owns in Melrose Park and consolidate the resources of the two in Oak Park.

Pipeline Health, a California-based private healthcare network, purchased West Suburban along with Weiss Memorial in Chicago and Westlake Hospital in Melrose Park from Dallas-based Tenet Healthcare for $70 million in January.

Two weeks later, Pipeline announced that it planned on closing Westlake this year in order to invest in West Suburban and Weiss.

After announcing the pending closure of the 233-bed Melrose Park hospital last month, Pipeline officials said they'll invite qualified Westlake employees to apply for positions at West Suburban or Weiss Memorial, and that a community shuttle between Melrose Park and West Suburban in Oak Park "is also in the works."

They added that Westlake's in-patient services, including gynecology, intensive care and obstetrics, among others, will be consolidated at West Suburban.

The pending changes, however, have been overshadowed by the public outcry that has accompanied Pipeline's announcement to close Westlake. The move was swiftly condemned by Westlake employees, community members and Melrose Park village officials, who filed a lawsuit on March 7 in Cook County Circuit Court's Chancery Division against Pipeline and other entities.

The lawsuit alleges that Pipeline and its principals committed fraud and civil conspiracy during the process of purchasing the hospitals by telling state regulatory officials, Melrose Park officials and various Westlake stakeholders that they planned to continue operating the hospital.

In addition to Pipeline Health, the complaint names Eric Whitaker and Nicholas Orzano, Pipeline's principals, as defendants. TWG Partners, a private equity firm headed up by Whitaker — a close friend of former president Barack Obama — is also listed as a defendant.

During a March 8 hearing before the Illinois House's Appropriations-Human Services Committee in Chicago, local lawmakers, Westlake employees and community members described Pipeline's principals as deceptive absentee owners who only bought the struggling hospital — which services predominantly low-income and minority patients who would not otherwise afford medical care — to shore up its bottom line.

"Pipeline was less than honest and less than caring, except for profits," Dr. Nabil Saleh, a longtime Westlake pediatrician, told lawmakers. "One day prior to announcing the closure of the hospital, my colleagues and I met with the medical director. … He assured us of the future and we promised to work hard with him to achieve the goals. Nothing could have been more deceitful."

State Rep. Emanuel "Chris" Welch (D-7th), who sits on Westlake's trustee board and whose district includes parts of the hospital's service market, said that he was in "regular communication with Whitaker during the entire time they were purchasing the facility and at no time did Whitaker say they were selling the hospital."

Welch also slammed Pipeline, which sent no officials to the March 8 hearing. 

Pipeline CEO Jim Edwards submitted a five-page letter to the committee explaining he was "fully prepared to testify" before Melrose Park filed its lawsuit the day before.

Edwards wrote that he was "disappointed" with the lawsuit's timing. In a statement released last week, Pipeline officials called the lawsuit "defamatory and false."

Welch, however, disregarded Edwards' explanation for his absence as part of a weeks-long attempt by Pipeline to "avoid answering questions" about the closure.

"[Pipeline officials] didn't show up to a board meeting after purchasing Westlake, they cancelled the last board meeting after announcing they'd close and they used the lawsuit as an excuse not to show up today," Welch said. "Pipeline can run, but they can't hide. We are going to seek them out."

During the March 8 hearing, Shelly Pechulis, an emergency room nurse at Westlake, addressed Pipeline's proposal to transfer some Westlake employees to West Suburban Medical Center or Weiss. She said that there was a job fair at Westlake and that two HR recruiters from West Suburban and Weiss "came to our cafeteria and said they have positions open at each hospital."

The recruiters, Pechulis said, did not tell anyone how many openings they have at either hospital. She said that she looked into personnel openings at West Suburban and only found "one nurse position" open. West Suburban officials could not be reached last week to comment on the openings.

During a hearing held March 11 by the Illinois Health Facilities and Services Review Board, the regulatory agency that approves hospital change of ownership and closure applications, Joseph Ottolino, the CEO of both Westlake and West Suburban, said that Pipeline's proposal to close Westlake is consistent with its goal of "modernizing" its healthcare offerings.

"The way that doctors and nurses provide care has changed," he said. "Hospitals do not play the same role they once did."

Ottolino added that Westlake's operating losses in 2018 exceeded $14 million and that it serviced a region with "an excess of 473" medical, surgical and pediatric beds.

During the March 8 committee hearing, Dr. Glenn Kushner, the president of Westlake's medical staff, pushed back against Pipeline's claims that closing Westlake would allow them to invest more in the patients within their network.

"I hear that Pipeline wants to invest in people not buildings," Kushner said. "Westlake is not made of bricks and mortar" but of community members.

Kushner said Tenet Healthcare, the hospital's previous owner, "only cared about the bottom line and did not invest much in the hospital which is why we're in the predicament we're in now. They came like vultures and left us to die, but we have survived."

Kushner said that Westlake's planned closure is part of a national pattern of companies closing community hospitals in poor and minority areas while building "bigger hospitals in richer suburbs." He said that if "Rosa Parks rode the bus today, she'd see the same struggle."

Kushner said that "it's been shown when corporations close the community hospitals, the doctors leave the area, as well."

He lambasted Pipeline's proposal to provide shuttle busses to patients, who may include pregnant women, to West Suburban, and argued that closing Westlake could possibly translate into longer ambulance run times that could have a ripple effect.

"More people will die waiting for help to arrive," he said. "This is inequality at its highest form."

Welch and other community leaders urged the Illinois Health Facilities and Services Review Board to send the matter of Westlake's closing to the Illinois Attorney General for an investigation into Pipeline's conduct during the purchasing process.

When asked if he was concerned about West Suburban's future in light of the allegations of fraud and conspiracy, state Sen. Don Harmon (D-39th), who attended the March 8 committee hearing in Chicago, said that he's "been assured by the new owners" that they're "committed to bolstering their committed to bolstering operations at West Suburban."

CONTACT: michael@oakpark.com  

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