Unexpected Increase in Charity Care Disclosed at Health and Hospitals System Board Meeting

COOK COUNTY HEALTH AND HOSPITALS SYSTEM BOARD OF DIRECTORS MEETING

November 20, 2015, 10:30am 

Chairman Hill Hammock noted that the CCHHS Finance Committee immediately preceded the Board meeting (9-10:30am) due to scheduling issues which prohibited it from being convened during the prior week.  He determined that the Finance Committee report would not be repeated during the full Board of Directors meeting as all but one Director was able to attend the Finance Committee.

He stipulated that Director Marsh, who could not attend the Finance Committee, was free to pose any questions she thought were warranted for her to be fully informed on all Board actions.

Committee Reports:

Finance Committee:  Director Marsh asked several questions about the $72,099,000, 3 year contract (4-1-16 through 3-31-19) with Valence Health which is replacing IlliniCare as the current 3rd party administrator of CountyCare (Medicaid).  Doug Elwell, Deputy CEO, responded that this was a competitive bid selection and is expected to save CCHHS $10-15 million per year.  Some of the reasons for the savings include bringing in-house some services that IlliniCare was tasked with including Behavioral Health care integration which will now be the responsibility of the individual provider.  Mr. Elwell concurred that the primary reason for severing the contract with IlliniCare, mid-contract period, was the increasing direct competition of IlliniCare’s managed care health plan with CountyCare which was felt to represent a conflict of interest.  Dir. Marsh questioned the level of diversity on the Board of Valence Health and diversity in the other levels of management and contracts with minority owned businesses.  Mr. Elwell and Chair Hammock indicated that Valence met CCHHS’s diversity policy. She asked whether this was the most costly outside contract that CCHHS was signing.  Mr. Elwell replied that it was second to the Cerner contract which was the largest.

  

Doug Elwell reported that October revenues were down due to lower numbers of patient hospitalizations, although length of stay was not decreased, meaning there was a need for better managed care interventions.  CCHHS is still owed $120 million by the State of Illinois (not paid due to budget impasse) and he said CCHHS may have to loan funds to the State to obtain Federal matching funds for Medicaid and other programs.  Director Lerner cautioned about the future when the State will be required to pay 10% of the cost of the newly eligible PPACA members (ObamaCare) by 2020; “the system can not look the same”.

Charity care has unexpectedly increased from what was thought to be a plateau in 2014. This is due to:

1. overflow from other hospitals that have restricted charity care; 
2. patients with an Affordable Care Act plan with unaffordable high deductibles are coming to CCHHS and refusing to complete charity care forms so their care can not be counted as charity for calculating the Federal Disproportionate Share Hospital payments.  Most of this will be considered “bad debt”.

Director Velasquez noted that 17 of the 20 healthcare cooperatives created under the ACA have failed and these patients will be coming to CCHHS.

Chair Hammock noted that the CCHHS 2016 budget was approved by the Cook County Board.  He asked Mr. Elwell whether CCHHS would be able to stay within the budget in 2016 and Elwell responded that he predicted a “breakeven”.

Quality and Patient Safety Committee:  Dr. Das reported that there were no real improvements in the metrics, including patient willingness to recommend Stroger Hospital.  Multidimensional interventions including rounding on the wards by staff are on-going.

  

CEO Shannon reported that they expect the JCAHO inspection before the end of November and all departments are devoting extraordinary care and time to prepare.  Dir. Gugenheim pointed out that the inspectors look at trends and therefore, the slow improvement will overcome the less than optimal metrics.

Special presentation on Group Purchasing Organizations (GPO) which allow group purchasing by member hospitals/groups of supplies, pharmaceuticals, services at a discount taking advantage of the economy of scale. The speaker stated that the 5 top GPOs cover the majority of healthcare in the USA.  Value of GPOs include lower cost, better reliability and transparency of the process. GPOs are free to the member hospitals and charge the vendors for being a part of the group. In addition to major set discounts, hospital members may earn a dividend/rebate (called patronage) based on volume.  CCHHS earns over 1 million dollars a year in this “rebate”.  A 1986 Federal statute grants GPOs a “safe harbor” from the “kickback” laws.

Dir. Lerner wondered what happens when the GPOs consolidate leading to a monopoly.  Dir. Marsh asked whether providers (physicians) had input into the selection of vendors/vendor products and was told “yes”.

Report of the Cook County Department of Public Health (administratively a part of CCHHS)

Dr. Terry Mason presented a powerpoint of the services provided by CCDPH including food establishment inspections, environmental health, vector control, etc.  The lead poisoning prevention program and lead abatement plan is undertaken when the lead level is greater than 10 micrograms/dl. Paint used prior to 1978, still present in many of the older CC buildings, often contained lead. Dir. Lowry, who served in the past as commissioner of Chicago’s Department of Buildings, was concerned that the high level of lead that triggered abatement exceeded the threshold for federal grants and could be a health catastrophe. She indicated that a level of 2 micrograms/dl is the safe level. Dr. Mason agreed, but added that it was very expensive to undertake lead abatement and the money was not available.

The meeting adjourned to closed session at 1:20pm.

Submitted by Susan Kern,MD, LWV CC Health Issues Committee