County Hospital System Resists Cutting $27M at Cook County Budget Hearing

Cook County Board of Commissioners Finance Committee - Departmental Budget Hearings
November 7, 2017

Cook County Health and Hospitals System (CCHHS)

Commissioners absent for all or most of the meetings: Moody
Commissioners present:  Arroyo, Boykin, Butler (half the day), Daley, Deer, Fritchey (less than an hour), Gainer, Garcia, Goslin, Moore, Morrison, Schneider, Silvestri, Sims, Suffredin, Tobolski

Hospital System CEO Shannon’s letter outlined $12,430,000 in cuts of the $27 million requested (the amount allocated to CCHHS from Sweetened Beverage tax)  

1. Closure of Oak Forest facility, patients transferred to other CCHHS sites
2. Overtime reductions by filling vacancies faster, & better coordination of staffing
3. Eliminate Tuberculosis Fund and lead monitoring & positions, with care transferred to Stroger
4. Eliminate Access to Care (suburban primary care)
5. Reduce pharmacy outpatient hours & positions
6. Transfer Child Advocacy Center to Stroger Hospital
7. ​Merge Morton East Clinic with Cicero Clinic
8. IT help desk consolidation, merge other departments, eliminate Grants
9. Merge substance abuse staffing with other departments
10. Eliminate vacancies that are unfilled for more than 2 years

​Items of Interest at the Hearing:

• Commissioners Morrison, Tobolski and Boykin asked the most probing questions, calling for the full $27 million in cuts out of the Hospital’s $2.4 billion budget, citing other County departments who were being forced to eliminate attorneys and other public safety and justice programs which were the responsibility of government.  Shannon replied that any further cuts would have a detrimental impact on both revenue and care delivery due to decreased services.  Commissioner Morrison responded that Shannon, not the Cook County Commissioners, is responsible for identifying cost savings and making the hard decisions on where to cut.   “CCHHS needs the $403 million ($110 million direct subsidy plus $293 million pension and debt service) of tax payers’ funds for 2018 so they need to work collaboratively with the other Cook County departments to fill the $200 million deficit resulting from the loss of the beverage tax repeal” stated Morrison, echoed by Comm. Tobolski, Boykin and others.
• Comm. Suffredin noted that $22 million of the DSH (**Disproportionate Share Hospital, CCHHS 2018 Budget on their website listed DSH  total of $134.3 million) federal subsidy to indigent care hospitals was not included as revenue in the budget. Shannon replied that renewal of DSH had not been passed in Congress yet, but if paid, would be deducted from the $110 million CC hospital subsidy.
• Comm. Boykin asked what the total expenditure on outside contracts/procurements was.  Deputy CEO Elwell said he did not have that information immediately available and would get back, but agreed that it was a big dollar amount.
• Comm. Boykin asked why the outpatient pharmacy wasn’t closed rather than just reducing hours, which would be greater cost savings.  Shannon responded that the un-insured population don’t have access to medications at commercial pharmacies, so they need to obtain them at CCHHS.
• Several Commissioners asked about employee salaries, including nurses, IT etc. noting that they were significantly higher than at comparable hospitals and that there seemed to be an excess of highly paid administrative staff.  They were told they were all “justified based on CCHHS union pay scale, step increases, longevity & certifications”.
• Comm. Boykin asked what the total “bad debt” was.   When several different dollar amounts ranging from $90 to over $300 million were given to him, he asked why the CC Board was not being given an accurate number and what was being done to collect these accounts receivable.  He was told that collections on bad medical debt was limited because most of the patients had no money and that very few companies would be interested in pursuing it.  Comm. Sims asked for comparison of yield with prior debt collection vendors.   The $90 million number is what is probably collectable.
• Questions on why the 680 vacancy positions at CCHHS were not just eliminated, with cost savings.  Shannon said that only 10% of the cost of these vacancies was included in the budget and that most of them were in the process of being filled.  There is a normal turn-over of staff due to retirement, relocation etc. and no cost savings would result.
• Commissioners asked what the number of staffed beds, RNs, RN/patient ratio and inpatient census were.  Shannon said he thought there were 415 beds (**CCHHS website states 464) and didn’t know the exact number of RNs or census for Stroger or Provident.  What is the ratio of clinical to non-clinical FTEs?  Shannon said 35% non-clinical.  
• Comm. Garcia asked about the budget experience of the CCHHS independent Board and was told several were highly qualified in this area.
• Many of the Commissioners asked whether CCHHS had ever shown a profit.  The CEO provided a rather ambiguous response.  (***CountyCare as a component of CCHHS per the published financials may have had an operating profit if pension & debt service were not factored in.)
• What was the cost of the FHN (Family Health Network) acquisition which is expected to result in an additional 160,000 CountyCare members?  A specific dollar amount was not provided, but CCHHS CEO expects most of the cost to be paid by the additional Medicaid capitated premiums and an additional 22 FTEs will be required to handle the increased volume of members.  Comm. Schneider wondered if there was enough capacity at CCHHS for this large increase in patients which Shannon assured him there was more than enough capacity.   
• Comm. Tobolski asked for the risk profile of the new FHN members, annual cost and capitated income per member which the CEO did not know.  What is the capitated rate and expense for the current CountyCare members.  Shannon responded monthly payments are $626 for ACA Medicaid, Traditional Medicaid: in the low $200s and for seniors & persons with disability $1,150. Cost per member not mentioned.   Several of the Commissioners questioned CCHHS on their risky uni-lateral decision to purchase Family Health Network without consulting with the CC Board, leaving the CC taxpayers as the deep pockets if this endeavor failed.

Observer - Dr. Susan Kern                                                                   Length of Meeting - 7 hours