Rush and Endeavor Are Merging. Chicago Employers Should Plan for the Price Tag.

Rush University System for Health and Endeavor Health plan to merge into one 12-hospital system with nearly $11 billion in revenue. It would edge out Northwestern Medicine and Advocate for the most hospitals in the Chicago area, by one. For employers, this isn't a story about who's biggest. It's about who sets your hospital prices for the next decade, and how much bargaining power your carrier has left.

What did Rush and Endeavor announce?

They plan to combine into one nonprofit academic health system. Endeavor brings nine hospitals: Evanston, Glenbrook, Highland Park, Skokie, Swedish, Northwest Community, Edward, Elmhurst and Linden Oaks. Rush brings three: Rush University Medical Center, Rush Oak Park and Rush Copley in Aurora.

The new system would carry the Rush name. Endeavor CEO J.P. Gallagher would lead it. Rush CEO Dr. Omar Lateef stays through closing, then becomes CEO emeritus. A 20-person board would split seats evenly between the two sides.

Endeavor has pledged $1 billion tied to the deal. That's $500 million for academics and research, $300 million for community impact and $200 million for quality and innovation.

Endeavor is itself a roll-up. NorthShore absorbed Swedish in 2020 and Northwest Community in 2021. It merged with Edward-Elmhurst in January 2022 and took the Endeavor name in late 2023. Now that name goes away too.

Why should a Chicago employer care about a hospital merger?

Because hospital prices drive your health plan's cost, and you don't set them. Your carrier or network negotiates them. When two systems become one, the carrier faces one negotiator instead of two.

That changes the math at the table. A carrier can walk away from one mid-size system and still sell a network. Walking away from 12 hospitals across the North Shore, the city and the western suburbs is a different story. Big systems know it. They often insist that every hospital stays in network, or none do.

The bigger shift is the shape of the market. Northwestern Medicine runs 11 hospitals and reported about $9.6 billion in revenue for fiscal 2024. Advocate runs 11 hospitals in the region and belongs to a multistate parent. Add a combined Rush, and Chicago becomes a market of three large systems. A broad carrier network can't credibly leave any of them out.

There's local overlap, too. Rush Copley in Aurora and Edward in Naperville serve neighboring communities. Rush Oak Park and Elmhurst Hospital sit a few suburbs apart on the west side. Expect regulators to look hard at those pairs.

Do hospital mergers actually raise prices?

Yes. The research is consistent. A study of 366 hospital mergers by Zack Cooper and colleagues found prices rose more than 6% when the merging hospitals were about 5 miles apart or less. The same paper, The Price Ain't Right?, found monopoly hospitals charge 12% more than hospitals facing four or more rivals.

Distance doesn't make you safe. Leemore Dafny and co-authors found that cross-market hospital mergers within the same state raised prices 7% to 9% at the acquiring hospitals. The driver is bargaining power with insurers, not patient overlap.

Chicago has seen this fight before. In 2017, the FTC and the State of Illinois won a court order to stop Advocate and NorthShore from merging, and the two systems dropped the deal. NorthShore is now part of Endeavor.

Illinois also requires health care systems to notify the Attorney General at least 30 days before closing a deal like this. So the state gets a look. A review isn't a block, though.

What will this cost my plan?

Run the math on your own claims. Here's an illustrative example. Say a 250-employee self-funded plan spends $3 million a year on medical claims, and $1.2 million of that goes to Rush and Endeavor facilities. A 6% to 9% price increase on that spend is $72,000 to $108,000 a year. Every year after.

It won't land at your next renewal. Carrier contracts with hospital systems run for years, so new rates arrive as those contracts come up. That gives you time. Use it.

Fully insured groups will see the increase folded into trend, with no line item to point to. It's the same squeeze behind this year's Illinois Blue Cross renewals. Self-funded groups see it in claims, facility by facility. Higher unit costs also push more large claims past your stop-loss deductible, so specific premiums follow.

What should employers do before the deal closes?

Get the data, then build options. Five moves:

1. Measure your exposure. Pull 24 months of claims by facility. What share of spend goes to Rush and Endeavor today? Fully insured groups may have to push for it, because your carrier holds the claims data.
2. Ask about contract timing. When do your carrier's or TPA's contracts with each system renew? Do those contracts allow tiering or steering?
3. Move shoppable care. Joint replacements don't need an academic medical center. Centers of excellence often beat the hospital ten minutes away on price and outcomes.
4. Price reference-based pricing for part of the plan. Paying a set multiple of Medicare caps your exposure to whatever the merged system negotiates. The vendor you pick matters as much as the model.
5. Watch the regulators. The FTC and Illinois can still challenge the deal or change its terms. Nothing is final until it closes.

Chicago's hospital market keeps getting more concentrated. Your plan design shouldn't assume the next renewal looks like the last one.

Frequently asked questions

When will the Rush and Endeavor merger close?

The systems expect it to close in early 2027. State and federal regulators still have to approve it, and they may examine whether it reduces competition or raises prices. Illinois law also requires notice to the Attorney General at least 30 days before a health care deal like this closes.

Will my employees lose access to Rush or Endeavor hospitals?

Not because of the merger itself. Network access depends on your carrier's contracts with the combined system. The bigger risk runs the other way: a larger system has more power to demand that every hospital stays in network at higher rates.

Does self-funding protect an employer from hospital price increases?

Not automatically. Most self-funded plans rent a carrier network and pay the same negotiated rates. The advantage is visibility and control: you see claims by facility and can add steering, centers of excellence or reference-based pricing. Our funding models guide compares the options side by side.

How much do hospital mergers raise prices?

Peer-reviewed studies put it at more than 6% when merging hospitals are close together, and 7% to 9% at acquiring hospitals when a system buys a hospital elsewhere in the same state. Results vary by deal. The increase shows up as carrier contracts renew, not on the day a merger closes.