REPORT OF THE TASK FORCE ON HOSPITAL GOVERNANCE

 

December 11, 2007

 

The Honorable,

The Board of Commissioners of Cook County

 

ATTENDANCE

 

Present:

Chairman Goslin and Vice Chairman Murphy, Commissioners Butler, Collins, Daley, Moreno and Silvestri (7)

 

Absent:

None (0)

 

Also Present:

Commissioners Gorman, Maldonado, Peraica, Quigley, Schneider and Sims; Michael Prinzi - Assistant State’s Attorney, Division Chief, Transactions, Municipal Litigation and Real Estate Taxation Division; Richard Velázquez – Special Counsel to the President; Dr. Robert Simon - Interim Chief of the Bureau of Health Services

 

 

Ladies and Gentlemen:

 

        Your Task Force on Hospital Governance of the Board of Commissioners of Cook County met pursuant to notice on Tuesday, December 11, 2007 at the hour of 9:15 A.M. in the Board Room, Room 569, County Building, 118 North Clark Street, Chicago, Illinois.

 

        The purpose of the meeting was to take testimony from various representatives of the Civic Federation, the Metropolitan Chicago Healthcare Council and the National Public Hospital Association.

 

Chairman Goslin called the meeting to order, and called upon Mr. Kevin Scanlan, President and Chief Executive Officer of the Metropolitan Chicago Healthcare Council.

 

Mr. Scanlan testified on behalf of the Metropolitan Chicago Healthcare Council, which is an organization representing one hundred forty hospitals and healthcare organizations in the metropolitan Chicagoland area.  He stated that Oak Forest, Provident and Stroger Hospitals have been members for decades and have utilized member services provided by the Metropolitan Chicago Healthcare Council such as unemployment compensation administration, group purchasing, compensation surveys and revenue cycle consulting.

 

Mr. Scanlan stated that the Bureau of Health Services has a critical role in the regional health care safety net.  The financial viability of all hospitals and the regional health care safety net continues to be challenged through increasing numbers of uninsured; significant and ongoing under-funding from the state and federal government for the Medicaid and Medicare programs; coupled with an aging population and demands for enhanced technology.  Approximately seventy percent of the more than fifty private hospitals located in Cook County report negative care margins.  These same hospitals provided $2.3 billion in annual charitable care, which includes $1.6 billion in free care.  When combined with the Bureau of Health Services’ Fiscal Year 2007 budget, all hospitals in Cook County provided more than $3 billion in free care and other charitable care services.

 

On the issue of governance, Mr. Scanlan stated that while the Board is contemplating future governance structures, the focus should be on the future of the Bureau of Health Services.  He did not indicate preference to any particular governance structure; he believed that the Bureau of Health Services’ governance decisions should be considered and made by the Board of Commissioners.

 

Chairman Goslin asked Mr. Scanlan how the patient load would be absorbed if the Bureau of Health were to be dissolved or services provided were to be significantly reduced.

 

Mr. Scanlan replied that they could not be absorbed, and the result might mean the closure of other institutions.

 

Chairman Goslin asked Mr. Scanlan for information on the Metropolitan Chicago Healthcare Council members’ percentage of “self-pay” patients by institution.

 

Mr. Scanlan responded that he would supply it to him.

 

Commissioner Daley asked Mr. Scanlan for a breakdown of the $3 billion in annual charitable care.

 

Mr. Scanlan responded that he could provide Commissioner Daley with a breakdown of the $2.3 billion in charitable care provided by the more than fifty private hospitals. 

 

Commissioner Daley stated that some suggestions had been made to resolve the Bureau of Health Services’ financial position.  These suggestions include the closure of Provident Hospital and the removal of tax exempt status for some private hospitals who are not providing a certain amount of charitable care.  He asked Mr. Scanlan what would be the impact of such measures. 

 

Mr. Scanlan replied that the closure of Provident Hospital would have patients turning to local hospitals.  Taking away tax exempt status from the private hospitals would put some of these institutions at the brink of closure.  There would be significant cuts in services and it would increase the patient load at Stroger Hospital.

 

Chairman Goslin called upon the next public speaker.

 

Ms. Lise Valentine, Vice President and Director of Research of the Civic Federation read into the record a statement provided by Mr. Lawrence Msall, President of the Civic Federation. (See Attachment #1.)

 

Commissioner Daley stated that a truly independent board needs taxing authority and needs to be totally separate from the Board of Commissioners.  He believed that if the Board chose to implement a temporary independent governing structure, the Board would continue to approve the budget until such time a permanent independent governing structure with taxing authority was functioning.  In order to effect such change in Springfield, a collective effort from the elected officials and community leaders must be made.

 

Commissioner Butler was concerned with the perceived lack of understanding of the mission of the Bureau of Health Services.  He believed that the Bureau of Health was never given adequate funds and questioned how the Board would pay the costs associated with independent governance.

 

Commissioner Silvestri opined that if the Board of Commissioners has to approve a budget for an independent governance board, then it is not truly independent.  He believed that an interim period for independent governance should be ten years; interim periods of one or three years are too short to achieve meaningful successes.

 

Chairman Goslin called upon the next public speaker.

 

The next speaker was Reverend Alexander Sharp, Executive Director of Protestants for the Common Good, and Vice Chairman of the Center for Tax and Budget Accountability.  (See Attachment #2.)  He spoke in support of an interim independent governing board, and if possible, a permanent independent governing board.  He referenced portions of the Goodman Report and challenged that the Bureau’s revenue uncollectables were overstated in the report.  He believed that they were in the range of $40 million to $140 million, not $200 million.

 

Commissioner Daley remarked that the County Commissioners have received audit reports every year that detail problems at the institutions under the Bureau of Health Services.  He added that the Bureau of Health Services has improved in recent times, pointing out that the rejection rate for Medicaid eligibility intake forms has decreased from 76% to 15%. Furthermore, he stated that the Goodman Report recommended hiring one hundred forty-four people for finance related matters and seventy people to work on information technology matters. 

 

Commissioner Silvestri reminded the Task Force members that a recent bill to shift $100 million in subsidies to the Cook County Bureau of Health Services failed to pass in Springfield.

 

Commissioner Collins stated that a coalition should be organized to lobby in Springfield.  Additionally, she questioned why Cook County is the only county in Illinois that recognizes their responsibility for providing healthcare to their indigent.

 

Commissioner Sims stated her opposition to independent governance.  She envisioned irreconcilable conflict over budgetary matters between an independent governance board and the Board of Commissioners.  She believed that the Board should instead give the President the same amount of time proposed for the temporary trusteeship to turn around the Bureau’s financial position.  A national search should be conducted to find an expert to run the hospitals under the current governance structure.

 

Commissioner Maldonado stated that he agreed with Commissioner Sims in principle, as he was opposed to privatization of the Bureau of Health Services.  He was also concerned that there may be transparency issues related to adding another layer of government through an independent governance board.  The temporary trusteeship is the only option at this time that he supports. 

 

Chairman Goslin called upon the next public speaker.

 

Quentin Young, M.D., Chairman of Health and Medicine Policy Research Group, spoke on behalf of the establishment of a temporary trusteeship.  He believes that it is impossible to solve the Bureau of Health Services’ financial problems without new taxes.

 

Commissioner Daley pointed out that a temporary trusteeship would still need to come to the Board for revenue.

 

Chairman Goslin called upon the next public speaker.

 

Lynne Johnson, Director of the Chicago Foundation for Women, spoke in favor of a temporary trusteeship.  (See Attachment #3 – which includes the statement of Mary Morten, Acting Executive Director of the Chicago Foundation for Women.)

 

Chairman Goslin called upon the next public speaker.

 

George Blakemore, a concerned citizen, spoke in favor of an interim trusteeship.

 

Commissioner Moreno asked Robert Simon, M.D., Interim Chief of the Bureau of Health Services, whether an independent board would solve the Bureau of Health Services’ revenue problems.

 

Dr. Simon responded that it would not; most institutions across the country are experiencing huge financial problems regardless of the type of governance.  As he had mentioned at the meeting of the Task Force on Hospital Governance on November 13, 2007, Dr. Simon again recommended that the Board of Commissioners bring in Larry Gage, President of the National Association of Public Hospitals.  Mr. Gage has helped a number of other boards develop independent governance boards and has indicated his willingness to assist the County. 

 

Chairman Goslin responded that efforts to have Mr. Gage attend a Task Force meeting had been unsuccessful due to scheduling problems.

 

Dr. Simon responded that he would assist in the efforts to engage the assistance of Mr. Gage.

 

Dr. Simon requested to clarify an earlier statement regarding loss of employees.  He stated that the Bureau had 1,049 employees in the entire clinic system in 2002.  However, in 2007 there was a total number of 552 employees in the entire clinic system.  The clinic system cannot function at that level; for Fiscal Year 2008 a request was made for 425 new positions. 

 

At the request of Chairman Goslin, Dr. Simon addressed remarks made by Commissioner Peraica with regard to clinic closures that occurred in 2007 and the subsequent effects of such closures.  It was alleged that emergency room visits increased as a result of the clinic closures.

 

Dr. Simon replied that the statement was inaccurate.  There was no increase at the Bureau of Health Services’ emergency rooms; he verified that the surrounding hospitals experienced minimal increases in emergency room visits. 

 

Commissioner Schneider indicated that he was in favor of an independent governing board.  However, he questioned who would ultimately provide financial oversight over an independent governing board with taxing authority.

 

Chairman Goslin stated that the intent was to retain financial oversight by the Board of Commissioners.  He added that any transfer to an independent governing board would have strings attached, allowing for ultimate oversight by the Board of Commissioners.

 

Commissioner Butler cited an article in Healthcare IT News, which ranked Stroger Hospital of Cook County number one in the category of “Major Teaching Hospitals” in completeness and accuracy of their medical coding practices used to bill Medicare for inpatient medical services. 

 

Commissioner Silvestri, seconded by Commissioner Butler, moved to adjourn.  The motion carried and the meeting was adjourned.

 

 

 

 

Respectfully submitted,

Task Force on Hospital Governance

 

 

 

XXXXXXXXXXXXXXXXXXXXXXXXXX

Gregg Goslin, Chairman

 

Attest:

 

 

 

XXXXXXXXXXXXXXXXXXXXXXXXXXX

Matthew B. DeLeon, Secretary

 

** The audio recording for this meeting is available from the Office of the Secretary to the Board, 118 North Clark Street, Room 567, Chicago, IL 60602.