The board of Presence Health is expected to make a decision in October on whether to close Our Lady of the Resurrection Medical Center, according to a memo sent yesterday to employees at the Northwest Side community hospital.

The memo by John Baird, who is CEO of the hospital and nearby Resurrection Medical Center, paints a grim financial picture.

(More: Presence Health mulls shuttering Northwest Side hospital)

“The losses experienced at (Our Lady of the Resurrection) in particular are unsustainable and the projections for continued losses are greater,” according to the memo, which was obtained by Crain's. “In fact, declining volumes, unfavorable payer mix, and case mix are all contributing negatively to the current situation.”

Mr. Baird warned of possible layoffs, saying, “There are not long-term guarantees for employment opportunities.”

How many people work at the 269-bed hospital could not immediately be determined. Presence, a Chicago-based 12-hospital system, has about 22,000 employees and is cutting 700 full-time employees, either through layoffs, reducing hours or not filling vacant positions, to create efficiency and reduce costs as part of the 2011 merger that created the system.

Dr. David Fishman, director of the cardiology department at Our Lady of the Resurrection, said Presence Health seems to be abandoning the working-class Portage Park neighborhood.

“We all sort of feel a kinship and a loyalty to this place,” said Dr. Fishman, a former medical staff president at the hospital who has worked there for 35 years. “It's not beautiful, but it's really essential to the neighborhood.”

The hospital, 5645 W. Addison St., is projected to finish the year with a $20.7 million loss, the memo says. Because of a continued decline in patient volume and revenue, the hospital is projecting an additional $5.7 million loss in 2014, the memo says.

“There is an imperative for change and (Our Lady of the Resurrection) cannot maintain the status quo,” Mr. Baird's memo says.

In an interview with Crain's earlier today, Presence Health CEO Sandra Bruce confirmed that the hospital network was considering closing inpatient care at Our Lady of the Resurrection but keeping open the emergency department. Patients who would need to be admitted overnight would be sent to Resurrection Medical Center, 7435 W. Talcott Ave.

But one obstacle to that plan is an Illinois requirement that an emergency department must be accompanied by a 100-bed hospital, Mr. Baird's memo notes.

The Illinois Health Facilities and Services Review Board, which regulates the health care industry, would have to approve any change to Our Lady of the Resurrection.

Only about 20 percent of the hospital's patients were privately insured in 2011, according to the most recent hospital report to the Illinois Department of Public Health. The remaining patients were insured by the government through Medicare or Medicaid, or paid out of pocket.

Presence lost $28.9 million during the first half of the year. In 2012, the system posted an operating profit of $47.6 million on $2.74 billion in revenue.

The system will help employees who lose jobs transition into new ones or find them employment within Presence, the memo said.