Health system is closing two Wisconsin hospitals

Two Wisconsin hospitals that have served their communities for more than 130 years will soon be shutting their doors.

The Hospital Sisters Health System said this week that it will close HSHS Sacred Heart Hospital in Eau Claire and HSHS St. Joseph’s Hospital in Chippewa Falls over the next three months. The HSHS Sacred Heart hospital has 192 beds, while HSHS St. Joseph’s has about 100, according to the American Hospital Directory.

As part of the move, Prevea Health, a physician network providing primary and specialty care, plans to close its locations in western Wisconsin’s Chippewa Valley.

More than 1,400 people are losing jobs, including 1,082 HSHS employees and 325 Prevea physicians and staffers.

HSHS Sacred Heart Hospital has been serving Eau Claire since 1889, while HSHS St. Joseph’s Hospital has been operating in Chippewa Falls since 1885.

HSHS, a faith-based system operating 15 hospitals and a host of physician practices in Illinois and Wisconsin, cited a number of financial difficulties in the closure. In a news release, the system pointed to the fallout from the pandemic, inflation, as well as “workforce constraints, local market challenges and other industry-wide trends.”

Damond Boatwright, president and CEO of HSHS, said the health system and Prevea have struggled with a “mismatch in the supply of and demand” for healthcare services since they first set out to create an integrated health delivery model in 2015.

“We closely considered all other options and sought strategic alternatives,” Boatwright said in a statement. “After an agreement with a suitable partner did not work out, it was determined that exiting the market is the only feasible path forward.”

Most of the closures are expected to be completed by April 21. Most procedures scheduled at HSHS Sacred Heart after January 22 will be canceled to prepare for the closures, the system said in a notice to patients. HSHS St. Joseph’s Hospice will close March 22.

Ashok Rai, president and CEO of Prevea, said in a statement, “We are saddened by this outcome and recognize it will have an impact for our patients in these communities in the Chippewa Valley.”

Encompass Health, which operates The Rehabilitation Hospital of Western Wisconsin in a joint venture with HSHS Sacred Heart, said the facility is open and treating patients. In a statement to WEAU-TV, Encompass said it is “evaluating the situation, including the operational effect of HSHS Sacred Heart’s announcement. We will provide updates as possible.”

HSHS pointed to the difficulties facing rural hospitals across the country. Since 2010, 136 rural hospitals have closed, according to a report by the American Hospital Association.

• Read more: Rural hospitals struggle to find workers, and not just doctors

Hal Andrews, president and CEO of Trilliant Health, tells Chief Healthcare Executive® that the move to close the two hospitals is an indicator of the difficulties facing many hospitals. Some strong health systems are performing well, but the gap between successful and struggling systems is significant, he says.

“Before the pandemic, it was almost inconceivable that you would close a 200 bed hospital,” Andrews says.

“I think the hospitals that were the best financial performers, pre-pandemic, are sort of getting back to that,” he adds. “I think the pandemic may have struck a sort of a fatal blow for a number of hospitals that were struggling pre-pandemic, and they're just not going to recover.”

Another Wisconsin health system has been struggling. The Marshfield Clinic Health System announced furloughs last week as a cost-saving measure. The system said it would furlough about 3% of its staff. With a workforce of more than 12,000 workers, that would represent about 360 employees.

Earlier this month, Marshfield Clinic and Essentia Health issued a joint statement saying that they were dropping plans for a merger.

More than 600 rural hospitals are at risk of closing in the near future, according to the Center for Healthcare Quality & Payment Reform. Nine rural hospitals closed in 2023, the center said.