Ottawa watchdog group asks for state investigation into OSF consolidation plan

A citizen watchdog group has requested a state investigation into OSF HealthCare’s consolidation plan, warning the hospital chain has a healthcare monopoly in La Salle County and other nearby counties.

Last week, Citizens for Healthcare in Ottawa formally requested the Illinois Attorney General review OSF’s proposed shift of services from Ottawa to Peru – a move that has faced strong public opposition from both residents and officials in the eastern part of the county.

Specifically, OSF plans to reduce the Ottawa hospital’s capacity from 99 to 38 beds, and to eliminate the intensive care unit, labor and delivery services and most medical-surgical beds.

In the letter to the Attorney General requesting the investigation, CHO focuses on OSF’s growing monopoly, as it now owns all hospitals in the region.

Over the years, the healthcare group has acquired locations in Ottawa, Mendota, Princeton and the former St. Margaret’s Peru facility following its closure.

The letter notes that Ottawa’s current hospital has shown a high rate of use and strong performance metrics.

“We have a true gem of a hospital here in Ottawa,” CHO member Colleen Burns said. “It’s financially solvent and it’s been recognized nationally for its maternity and critical care. OSF’s plan puts all of that at risk.”

Saint Elizabeth Medical Center in Ottawa recently received an “A” grade in the Leapfrog Group’s Spring 2025 Hospital Safety Grades. The Leapfrog Group is a national, independent watchdog organization that evaluates hospitals on safety, quality and error prevention.

The group awarded “A” grades to fewer than one-third of U.S. hospitals.

Burns, a former health system data analyst, also raised concerns that OSF’s plan would impact lower-income patients.

“Ottawa serves more Medicaid and uninsured patients, while Peru has a higher proportion of privately insured individuals,” she said. “It appears OSF is consolidating not based on need, but on payer mix and that undermines the mission of a nonprofit healthcare provider.”

In the letter, the group also questions whether OSF is living up to its responsibilities as a tax-exempt organization, noting OSF got the Ottawa hospital for free in 2012, when it was valued at $58 million, and is now shifting its resources to benefit the larger hospital system instead of the Ottawa community.

They also argue that OSF’s recent hospital acquisitions, including the Peru facility that was purchased without a federal antitrust review, raise concerns about fair competition and consolidation.

OSF responded to Shaw Local News Network with a written statement regarding the investigation request.

“We are aware that a group has submitted a request to the Illinois Attorney General’s Office seeking a civil investigation,” the response reads. “While we have not received any formal notification of such an investigation, we want to be clear: We stand firmly behind our mission and record of providing high-quality, compassionate care to all individuals in the communities we serve.

“We are confident in the integrity of our operations and will fully cooperate with any official review, should one occur,” the response continues. “We have consistently gone above and beyond to meet the needs of our patients, especially in vulnerable and underserved areas and we remain committed to doing so every day.”

The group has previously filed a complaint with the Antitrust Division of the U.S. Department of Justice over OSF’s plans for its Ottawa and Peru locations.

Burns believes the public hasn’t been given clear answers and OSF hasn’t shared basic planning documents or explained why the changes are needed.

“They finally released raw patient origin data just this week - the same day we filed with the AG,” Burns said. “Even then, their own data supports our concerns. More patients will have to travel west to deliver babies than east.”

Looking ahead, OSF’s proposal is scheduled to go before the Illinois Health Facilities and Services Review Board for a final vote at 9 a.m. Tuesday, August 12, at the Embassy Suites, 100 Conference Center Drive, in East Peoria.

Burns believes that despite local opposition and a pending decision by the state board, OSF appears to already have a timeline to move forward with the closures on Monday, Aug. 18.

“They seem dead set on implementing these changes by the 18, regardless of whether the board approves the plan or not,” she said. “It feels like they’ve already set their timeline in stone, and the community’s voice isn’t being fully heard.”

In response to claims that moves will be made Aug. 18, OSF released a written statement to Shaw Local News Network.

“We remain committed to opening inpatient obstetrics and intensive care services at OSF Saint Elizabeth Medical Center – Peru," OSF responded. “This reflects months of thoughtful planning and preparation to ensure high-quality, sustainable care for the region.

“We are currently following the rules of the Illinois Health Facilities & Services Review Board, which approved our plan for obstetrics services in Peru at their August 2024 meeting.”

The Aug. 12 meeting is open to the public. CHO encourages the community to attend and is offering bus rides.

Organizers said bus seats are still available for those wishing to attend the meeting. Reservations can be made by contacting the Ottawa Chamber of Commerce at 815-433-0084.