CCHHS Board Proposes $11M Decrease in Taxpayers Subsidy in 2017 Budget

Cook County Health and Hospitals System Board Meeting -  August 26, 2016

Significant Decision Made:

The Cook County Health and Hospitals System (CCHHS) Board adopted a proposed budget of $1.849 billion that now goes to the Cook County Board for consideration/adoption slated for Sept. Importantly the direct Cook County (CC) proposed subsidy is shrinking from $121 million in 2016 to $110 million in 2017.  At $1.849 billion vs the $1.714 billion 2016 budget, the proposed 2017 budget assumes a $214 million deficit and this does not include pension costs of $175 million, depreciation of $28 million or debt servicing costs.

Budget concerns discussed at the meeting: 

• How will CCHHS balance what is predicted to be decreased CC subsidy and pension contribution from CC with increased labor costs (a proposed increase of 129 FTE's and salary increases of up to 4.2% for unionized staff)?  Dr. Shannon, CEO explained that the focus will be on increasing patient volumes in primary & specialty care and surgeries (dental benefits & mental health care attract patients) and decreasing costs such as overtime, 8.1% in July, which has chronically exceeded the goal of 5%.  
• Director Lerner questioned the rosy revenue and expense projections in the budget.  “What happens if they fail to materialize?”  D. Elwell, Deputy CEO of Finance & Strategy, agreed that that this was a very tight budget.  “Per member monthly payment rate for Medicaid patients (2/3 of patients) from the State is not out yet and due to the high CCHHS cost per plan member, 3rd party managed care plans refuse to contract with CCHHS”. 
• What keeps him up at night?  D. Elwell worries about overtime labor costs, concern that there is not enough investment for capital expenditures and equipment is aging, law suits against CCHHS to fund budget-breaking Hepatitis C treatment, such as Harboni (Hep C treatment may be over $100,000/patient).
• Dir. Lowry cautioned that the patient experience at CCHHS needed to improve to increase patient volumes.  D. Elwell responded that they are bringing in an outside organization to assist in making changes to counter patient complaints about lack of cleanliness, staff rudeness and long wait-times.   Dir. Driscoll noted that this organization needed to have experience with a unionized work force!

Items of Note:

• Per new Government Accounting Standards, the financial balance sheet is now required to report net pension liability which is $4.347 billion for CCHHS.

Four new CCHHS Board members were introduced:

• Layla Suleiman Gonzalez, PhD, JD leadership positions in Latino community engagement, IL Dept. Human Services and academic positions
• Virginia Bishop, MD, MPH, pediatrician/Assistant Prof. Northwestern U School of Medicine
• Sidney Thomas, MSW, Director Provider Relations, CCHHS, 25 years, healthcare consultant
• Mary Driscoll, RN, MPH, Division Chief Patient Safety and Quality at IL Dept. Pub. Health, Chief of Nursing Officer CC Bureau of Health Services

Observer: Susan Kern, MD                                                                 Meeting Length: 3 hours, 15 minutes