KSB, OSF HealthCare enter negotiations, anticipating merger

DIXON – KSB Hospital and OSF HealthCare have signed a term sheet marking their official partnership and expect a full merger, the two organizations announced Friday in a joint news release. The agreement includes $40 million in funding for facility renovations, to improve access to care locally and to create seamless referrals to subspecialties.

Education, including the residency programs at KSB Hospital, also is a key component of the agreement.

“As health care continues to evolve, we are responsible for ensuring that we are planning for the future,” David Schreiner, KSB’s president and CEO, said in the news release. “OSF HealthCare shares our deep commitment to caring for the health of rural communities and has demonstrated innovative ways to transform health care for the benefit of all people they serve.”

OSF HealthCare, headquartered in Peoria, has 16 hospitals with 2,131 licensed beds throughout Illinois and Michigan. OSF has about 24,000 employees, known as “mission partners,” across more than 150 locations. It operates OSF OnCall, a digital health operating unit; OSF Home Care Services, an extensive network of home health and hospice services; OSF HealthCare Foundation; and OSF Ventures, which provides investment capital for promising health care innovation startups.

OSF HealthCare has hospitals in Princeton, Mendota, Peru and Ottawa, including a center for health in Streator and a primary care facility in Sycamore.

KSB’s board of directors announced in February that it was formally exploring potential partnerships due to escalating operating and staffing costs, as well as changes to health care financing and how patients use health care. KSB Hospital, which employs 920 people and was established by community leaders in the late 1800s, is an independent, nonprofit organization. The hospital is an 80-bed facility that offers traditional inpatient and outpatient services in downtown Dixon. KSB also operates an integrated medical group with 70 practitioners providing medical services in primary and select specialty areas at six locations in Lee and southern Ogle counties.

In February, after the KSB board’s announcement, that hospital’s leadership said staffing would be a part of their dialogue with potential partners. OSF and KSB plan to keep current KSB practitioners and employees, according to the release.

“We appreciate that the process of selecting a new partner has created some degree of uncertainty for the employees of KSB and hope that they now feel reassured that the hospital will continue to serve the patients of the Sauk Valley communities well into the future,” OSF CEO Robert Sehring said in the release.

When the merger is finalized, a local community advisory council will be established to provide advice and counsel to hospital management and OSF. The council will focus on insight, guidance and the development of local strategies, in addition to providing feedback on the management of local facilities. Additionally, the merger intends to provide upgrades to technology and expanded digital care offerings to KSB, according to the release.

“Together, we will ensure continued quality and compassionate health care for the Dixon community and greater Sauk Valley region,” Sehring said.