Cook County Health CEO Sounds Financial Alarm | WBEZ
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Cook County Health CEO: ‘Something’s Got To Give, Or Somebody’s Got To Give To Us’

Cook County’s public health system expects to provide a staggering $590 million in health care next year that it won’t get paid for.

On Friday, Cook County Health CEO Dr. Jay Shannon warned that the amount could climb even higher if new federal rules begin in October. Those rules would deny permanent residency or visa renewals to immigrants who use or might use government programs like Medicaid. Shannon said those restrictions could make people wary of seeing doctors. Medicaid is public health insurance for people who are low-income or disabled.

“The chilling effect that this may have on people accessing services that they have a right to, is right now a large X factor,” Shannon said.

People who lose Medicaid might still see doctors at the county health system. But they’ll be uninsured, so the health system won’t get paid.

Shannon’s remarks came as he presented what he called a proposed “austere” budget for the fiscal year that starts on Dec.1. The budget is largely driven by the estimated soaring amount of so-called uncompensated care.

Uncompensated care is a mix of two buckets. The first is free treatment that doctors provide to people who are typically uninsured (this is known as charity care). The second is debt that accrues from insured patients who can’t afford their bills, and from insurance companies that won’t reimburse the health system.

As Shannon presented his proposed budget, he arrived at what he called his “gut check” slide. It showed the dramatic rise of Cook County Health’s uncompensated care tab. It totaled $536 million in 2013, then dropped to $314 million in 2014, a year after the health system launched its CountyCare Medicaid health insurance for people who are low-income or disabled. But the amount has climbed every year since.

Cook County Health’s latest prediction: uncompensated care will reach $590 million in 2020. That would be an 88% hike since 2014.

“The challenge for all of us … is to figure out how in the world are we going to pay for this,” Shannon said.

“Something’s got to give, or somebody’s got to give to us,” he said.

Bob Reiter Jr., a hospital board member who is president of the Chicago Federation of Labor, had this controversial suggestion: the Cook County Board should essentially raise its portion of property taxes, which have historically remained flat, by adding a cost-of-living adjustment.

“That one simple thing could be correcting the course on what we’re dealing with today, here,” Reiter said.

It’s not clear if the county board would have an appetite for this. Remember the doomed soda tax hike?

“Of course we know that, when we start talking about taxes, that’s kryptonite,” said Dennis Deer, a county board commissioner who also sits on the health system board.

Cook County Health is one of the largest public health systems in the nation. It’s a medical safety net considered to be the last resort for poor and uninsured patients in Cook County. The system has two hospitals — flagship John H. Stroger Jr. on the Near West Side and smaller Provident Hospital on the South Side — and a network of urban and suburban clinics.

Cook County Health’s swelling uncompensated care is partly fueled by other public and private hospitals throughout Cook County not treating more patients for free, a WBEZ analysis of state records shows. Collectively, other hospitals in recent years have provided less charity care, while the county health system’s two hospitals combined provided more, records show.

Hospitals don’t have to provide charity care. But they usually do to help keep what can be lucrative property tax breaks as part of a hospital-friendly 2012 Illinois law.

Shannon’s proposed budget comes in the midst of the county’s overall budget season. The health system is a significant part of the overall county budget, making up nearly half of the county’s roughly $6 billion budget.

For 2020, Shannon is proposing a $2.8 billion budget, a 7% increase over where the health system projects to end this fiscal year. He doesn’t plan any layoffs, but he’s told his employees to look at every contract and every new hire closely. Every dollar counts as the tab of uncompensated care climbs.

There are other financial challenges, too, including salary and benefits hikes for union employees, rising drug costs and a backlog of Medicaid applications at the state. That means Cook County Health patients who try to get on Medicaid or keep their insurance might still be getting care, but the health system isn’t getting reimbursed for it.

“Growing patient care revenue has been our only option for offsetting” these types of expenses, Shannon said.

There’s competition for patients from rival health systems that skim off healthy Cook County Health patients who have insurance. Those are the kinds of people Cook County Health is trying to woo more of to generate revenue.

The health system plans to bring in money by increasing services and access to care with new community clinics, and growing the health system’s CountyCare Medicaid plan. The business has become a key money-maker for the health system — and the county — because the Illinois Medicaid program pays CountyCare per enrollee. And enrollment is trending up, with more than 318,000 members.

The county is giving the health system an extra $13 million subsidy — a total of $115 million — to help fund the county public health department and medical services at county correctional facilities, including the Cook County Jail. Shannon said that still won’t cover all expenses, but it helps.

While the health system pitched a balanced budget for 2020, it’s predicting deficits in 2021 and 2022 due to the massive tab of uncompensated care.

The Cook County Board typically approves the county budget in November.

Kristen Schorsch covers Cook County politics for WBEZ. Follow her @kschorsch.

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