US HealthVest, a New York City-based facility investor and owner, and Peoria-based OSF HealthCare System have announced a joint venture (JV) to build the largest inpatient psychiatric hospital Illinois south of Chicago. This collaboration reflects a growing trend in healthcare where investment firms and local providers work together to address the nationwide shortage of psychiatric beds, a persistent challenge in the U.S. mental health system.
The new facility will feature 100 beds and be located on OSF HealthCare-owned land along Illinois Route 91 in Peoria, near other OSF facilities. Construction is expected to be completed in late 2024 or early 2025, with regulatory approvals already underway. The hospital will provide comprehensive 24/7 behavioral health services, including crisis care, free assessments, specialized programming, partial hospitalization, and intensive outpatient services, marking it as a key expansion in the region for psychiatric hospital Illinois care.
“Being able to bring in a large number of beds to central Illinois keeps people close to home and allows us to provide continuity of care within the community,” said Dr. Samuel Sears, director of behavioral health physician services at OSF HealthCare. “Family members can also be more involved in care, which is both evidence-based and compassionate.” This facility will help ensure that patients can receive acute mental health care without traveling long distances, a key concern for families seeking treatment in central Illinois.
US HealthVest’s Strategic Approach
The Peoria JV reflects US HealthVest’s broader strategy of building and owning new psychiatric hospitals through partnerships with local hospital systems. The model allows the local partner to manage day-to-day operations while US HealthVest provides oversight, focusing on psychiatric care, operational excellence, and strategic growth.
US HealthVest also targets states with certificate of need (CON) laws, which require approval from regulators before building new facilities. “While the CON process adds development time, it also provides strong competitive advantages, including high barriers to entry,” said Martina Sze, chief development officer for US HealthVest. The Peoria facility is already navigating this process, reflecting US HealthVest’s proven track record in Illinois.
Currently, US HealthVest oversees approximately 1,300 psychiatric beds across several states. The company has built three hospitals in Illinois, two each in Georgia and Washington, and one each in Indiana and Massachusetts. The organization also partners with Sturdy Memorial Hospital Inc., South Shore Health System Inc., and Signature Healthcare Corp. to develop a psychiatric hospital in Southeastern Massachusetts, a project that is still in its early stages.
Addressing the Growing Need for Psychiatric Beds
Psychiatric hospitals in the U.S. are at a critical juncture, driven by declining bed availability, increased awareness of mental health, and a growing number of individuals seeking treatment. During the COVID-19 pandemic, demand for behavioral health services surged, and US HealthVest has seen an uptick in development opportunities, especially through joint ventures that allow rapid expansion of inpatient capacity.
For decades, many medical-surgical hospitals have reduced or eliminated psychiatric units, leaving gaps in inpatient care. Meanwhile, new hospital construction often overlooks dedicated psychiatric beds. As the population of people seeking acute psychiatric treatment grows, the Peoria project will provide much-needed resources, establishing a leading psychiatric hospital Illinois residents can rely on.
“The overall market dynamics are favorable, with patient volume often exceeding bed availability,” said Dr. Richard Kresch, CEO and president of US HealthVest. The decline in state psychiatric beds is part of a decades-long trend of deinstitutionalization. In 1955, the U.S. had over 558,000 state psychiatric beds; by 2014, inpatient capacity had decreased dramatically. This has shifted the burden to acute psychiatric hospitals, which now serve patients in crisis who previously might have relied on long-term state facilities.
Enhancing Access and Quality of Care
US HealthVest hospitals are designed to provide a full continuum of care, from intensive inpatient treatment to partial hospitalization and outpatient services. The Peoria facility will allow seamless transitions between care levels while keeping patients close to their families and support systems, which is essential for recovery. By centralizing services, the hospital will improve access to high-quality mental health care, reinforcing its role as a premier psychiatric hospital Illinois families can trust.
This central Illinois location also addresses a critical geographic gap. Many patients previously had to travel significant distances to access inpatient psychiatric care, creating barriers to timely treatment. By building a 100-bed psychiatric hospital Illinois, US HealthVest and OSF HealthCare are making care more accessible, patient-centered, and locally focused.
Looking Ahead: Expansion and Partnerships
US HealthVest’s near-term focus is on identifying and executing additional joint ventures, while its long-term strategy remains centered on developing new hospitals and acquiring operating facilities when conditions are favorable. “It’s more of the same — the development of new hospitals and opportunistic acquisition of operating hospitals if circumstances are correct,” said Kresch.
The Peoria JV demonstrates the benefits of collaboration between investors and local providers. Combining financial resources, operational expertise, and clinical leadership accelerates the expansion of psychiatric care infrastructure while maintaining high-quality, evidence-based services.
With this project, US HealthVest and OSF HealthCare are setting a new standard for mental health care in Illinois, ensuring that patients and families have access to vital services. The 100-bed facility is poised to become a leading psychiatric hospital Illinois, providing hope and care for the region while addressing the broader challenges of psychiatric bed shortages across the country.
