In Dixon, a significant transition is on the horizon as OSF HealthCare gears up to take over the operations of KSB Hospital starting from January 1, 2025. This move is set to bring about changes and opportunities for the local healthcare landscape. A long-time OSF employee has been selected as president, while a long-time KSB Hospital employee will serve as vice president.

Leadership Shifts and Their Impact

Jackie Kernan, who has been with OSF since 2009, will assume the role of president of OSF HealthCare Saint Katharine Medical Center. This will be her third time leading a community hospital through a merger with OSF. As president, she will be responsible for aligning the hospital with OSF's overall strategy and directing internal operations while ensuring high-quality and cost-effective healthcare for all patients.Kernan earned her bachelor of science in nursing from the University of St. Francis and her master of science in nursing management leadership degree from the Saint Francis College of Nursing. She currently serves as president of OSF Saint Luke Medical Center in Kewanee and OSF HealthCare Saint Clare Medical Center in Princeton. She will continue to act as interim president at these locations until a new president is named.Drew Fenner, former vice president and chief quality officer of KSB Hospital, has been selected for the vice president position. He has been with KSB for over 10 years and will oversee operations and special projects at OSF Saint Katharine.

Renaming and Facility Improvements

KSB Hospital will be renamed OSF HealthCare Saint Katharine Medical Center in honor of Catholic Saint Katharine Drexel. This renaming is part of the integration process and marks a new chapter for the hospital. The agreement includes $40 million in funding for facility renovations to improve access to care locally and create seamless referrals to subspecialties.KSB Hospital, an independent, nonprofit organization with 80 beds, offers traditional inpatient and outpatient services in downtown Dixon. It 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. With the affiliation, KSB expects to continue employing its staff and making significant investments in building and technology to enhance access to specialty resources in the local community.

Challenges and the Path Forward

KSB began exploring potential partnerships in February due to escalating operating and staffing costs, as well as changes in healthcare financing and patient usage. The hospital's board analyzed the feasibility of continuing to operate independently and found that it would likely lead to closure.After the COVID-19 pandemic, KSB experienced an increase in expenses including wages, pharmaceuticals, utilities, facility costs, and medical supplies. These increased expenses were not covered by increased reimbursement rates as KSB serves a large portion of Medicare and Medicaid patients who are reimbursed at a lower rate than commercial insurance. As a result, KSB operated with negative margins in 2022 and 2023, eroding the balance sheet. In January 2024, the hospital's cash on hand dropped to five days, making it impossible to borrow funds and reinvest in the organization.However, with the partnership with OSF HealthCare, there is hope for a brighter future. OSF HealthCare, with 16 hospitals and 2,131 licensed beds throughout Illinois and Michigan, and about 24,000 "mission partners" across more than 150 locations, brings extensive resources and expertise to the table. It operates various units such as OSF OnCall, OSF Home Care Services, OSF HealthCare Foundation, and OSF Ventures to support the healthcare needs of the community.