Cook County Departmental Budget Hearings October 29, 2012

Health & Hospitals System’s Budget Balanced Thanks to Receiving 1115 Waiver from Fed. Govt. 

David Carvalho, Chair of the Board of the Cook County Health & Hospitals System (HHS), and Dr. Ram Raju, Chief Executive Officer of HHS, both expressed their great pleasure and relief that they were able to announce that the HHS had received an 1115 Medicaid Waiver from the Federal Government allowing them to enroll people now with incomes less than 133% of the poverty level and receive the Medicaid portion from the Federal Government, which is 48 cents on the dollar billed.  Currently, HHS might not be receiving even that amount.  In 2014, when the Affordable Health Care Act goes into effect, HHS will receive 100 cents on the dollar from the Federal Government for these people for 3 years, when it will drop down to 90 cents on the dollar.  (The State of Illinois is supposed to be supplying the remaining portion, but given the State’s financial condition, HHS is not expecting to receive any amount any time soon.)

As a result of this Waiver, HHS was presenting a balanced budget to the Cook County Board, albeit with a continuing subsidy from the County.  HHS expects to net $99 million over the costs of implementing the Waiver.  Absent the Waiver, HHS would have had a $99 million budget shortfall.  However, HHS has to do several things to maintain the Waiver, including signing up 115,000 people under the program.  HHS already has 67,000 qualifying people in its system and there are another 47,000 people in other federally qualified programs.  HHS estimates that there are 215,000 people in Cook County who would qualify under the program, meaning there are another 100,000 or so people that HHS could potentially sign up.  Work is underway to develop methods for reaching out to these people.

2013 Critical to Transforming HHS

Dr. Raju said that the 2013 budget presented to the Board is critical to transforming the health care system under the County to a patient-centered model.  When the Affordable Care Act goes into effect in 2014, many of the patients Cook County currently serves will now have health insurance and thus will have more options for care.  In order to keep patients with insurance who can pay for the care HHS provides, it is critical that they view HHS as an attractive option.  Otherwise, HHS will be left with only those patients who do not qualify to obtain insurance. 

While HHS continues to need significant dollars from the County to balance the HHS budget, Dr. Raju pointed to improvements in the HHS collecting fees from patients.  Revenues are up $100,000 more than in 2011, and physicians are at last billing for their services, with $5.2 million collected already thus far in 2012, and $12 million projected in 2013.  In addition, significant cost savings are being realized due to supply chain improvements.

Dr. Raju said that HHS needs to hire 444 people this year, with 144 positions needing to be filled in the next 8 to 10 weeks, and a plan to hire about 30 new people a month beyond that.  Dr. Raju stressed that HHS actually needs more people, but this budget reflects what can realistically be done during the course of the year.  He also stressed that he has eliminated all positions that won’t be filled this year.  (Often, departments maintain approved positions, but carry them at a $1/year salary.  All such positions have been eliminated from this HHS budget.)

Mr. Carvahlo stressed that one problem facing HHS is that the upper level salaries are not competitive enough to attract the talent needed.  HHS is working with Human Resources and the Shakman Compliance Officer to streamline the hiring process.

Patients from Outside Cook County

Based on a past survey, about 7% of the population being served through HHS comes from outside of the County, which amounts to about $25 to $30 million in costs.  In the past, HHS has not done a good job of keeping track of these people, but expects to do so in the future.  A new Illinois law prohibits a hospital that provides care from billing a patient whose income is less than 200% of poverty, no matter where the patient lives.  But a hospital is not obligated to provide care, except in emergency situations to save the patient’s life.  Currently, HHS provides all care.  The HHS Board is starting to have discussions as to whether there needs to be a change in policy for patients who come from outside the County.  Commissioner Tobolski stressed that Cook County taxpayers cannot continue to be asked to pay for care given to people from outside the County.

--Submitted by Priscilla Mims

Cook County Board Meeting on June 19, 2012

Board Approves New HHS Board Members and Redistricting Map

New HHS Board Members

By voting to accept the report of the Legislation and Intergovernmental Relations Committee meeting held earlier that morning, the Board approved Rev. Calvin S. Morris, Carmen Velasquez, and Dorene P. Wiese to new 3-year terms through June 30, 2015 to the Health & Hospitals Board.  Also approved was Edward L. Michael to complete the one-year remaining on term of a Board Member who resigned.  These appointments add to the diversity of the Board as the new members are an African American man, an Hispanic woman, a Native American woman, and a Caucasian man.

Separately, as part of the Revenue Report presented by the Comptroller to the Finance Committee, the CEO of the HHS, Dr. Raju, said that the current projection is for the HHS to be down $60 million from budgeted revenues for the fiscal year, though revenues, as compared to last year at this time, are up by 11%.  But he expects further strains on the system with people no longer being eligible for Medicaid under new Illinois legislation.

New Commissioner Districts for the 2014 Election

By accepting the report of the 2010 Redistricting Committee (see the Cook County Observer Blog report from the June 15 meeting), the Board adopted an ordinance creating new districts for the 17 Commissioners effective with the 2014 election. 

Proposed Amendment regarding Source of Income (SOI)

Item 10 on the New Items agenda is a proposed amendment to the County’s Fair Housing ordinance which would eliminate wording that allows a landlord to refuse to rent to people who want to use Federal Section 8 assistance as their source of income (SOI).  Commissioner Garcia, one of the sponsors, moved that the proposed amendment be sent to the Human Relations Committee, which was approved.  The League of Women Voters of Cook County is supporting this amendment.

Proposal for County Cemetery for Burying Unclaimed Deceased

Probably the most time during the Finance Committee portion of the meeting was spent on a resolution sponsored by Commissioner Fritchey to study creating a County cemetery to bury those in the County morgue who have not been claimed for burial elsewhere.  Commissioner Fritchey obviously felt that he had been given misleading or incorrect information by members of the Administration, and he took quite a bit of time to question Robin Kelly, the Chief Administrator of the County.  Commissioner Fritchey favored situating the proposed cemetery on part of the Oak Forest Hospital campus that is up for sale by the County, and which portion of the land is adjacent to an old cemetery.  However, it was clear from the statements of the other Commissioners that Commissioner Fritchey had no support for this resolution, and he withdrew it.

New Items

Several new items, not available to review prior to the meeting on the County’s web sites, were referred to Committees, including (New Item 15) a proposed change in the Procurement Ordinance to provide flexibility with the goal of having more Minority, Women-owned, and small businesses obtain contracts from the County; (New Item 16) a proposal to establish a Land  Bank Advisory Committee to advise on creation of a Cook County Land  Bank to help redevelop vacant and tax-delinquent properties; and (New Item 20) proposed appointments to the Medical Examiner’s Advisory Committee.

To watch the video of this meeting and/or to view the agenda items for this meeting and the committee meetings held before and during this Board Meeting, go to http://blog.cookcountyil.gov/secretarytotheboard.

-- submitted by Priscilla Mims

Nov. 9, 2011, Meetings on the Budget: Bureau of Human Resources & County Clerk

Bureau of Human Resources

The Director, Maureen O’Donnell, stated that the Bureau was in a shambles when she took over about 6 months ago, and since then, they have made great strides.  

• They are making progress in reaching compliance with the Shakman decree, which prohibits the hiring and firing of county workers for political reasons (other than in positions which the Court has specifically found to be “exempt”).
• The Bureau has presented 27 union contracts for Board approval to get caught up with the backlog of contracts covering periods from 2008 through the present. There are 104 bargaining units.  
• The Bureau is also focusing on absence management. The absence statistic is 10.5 days per year per employee, which is very high. The County could save $7 million per year if that average could be reduced by just one day, which Comm. Schneider highlighted in his questioning.  
• The Bureau is currently getting ready to deal with the proposed layoff of 1,000 employees that is called for under the 2012 proposed budget. 
•  Finally, Ms. O’Donnell said that the Bureau has a longer-term goal of creating a merit-based compensation system (at least for non-union employees) rather than the current step system, which is based on years of service.

Comm. Collins asked about the Taleo system that the Bureau is still implementing for processing applications on-line. A year ago, it took an average of 180 days to fill a position. Now it takes 124, which is still far more than where the County should be. Comm. Gainer urged that the Bureau include on its list of items in union negotiations reducing the number of holidays from the current 12 or 13 to the more standard 7; also to eliminate an employee's ability to carry over sick days and receive compensation for unused sick days when the employee leaves the County’s employ. She also asked about how the County can get to merit pay, and Ms. O’Donnell said the first step is to institute regular employee appraisals. Comm. Gainer also urged that the Bureau inform employees (as well as potential hires) about the value of their benefits, which are often much greater than in the private sector. Finally there was a discussion as to how much work the Bureau is still handling for the Health & Hospitals System (“HHS”), which Ms. O’Donnell characterized as still a lot. Comm. Gainer’s point was that the budget for human resource work in HHS is about $2.9 million and in this Bureau it is about $2.9 million; thus, it would seem that the HHS budget may be too large.

County Clerk

Clerk David Orr said that his area had exceeded the budgeted revenues for 2011 by about $400,000. For 2012, the election budget is $3.35 million lower than in 2008 (the last presidential election year), much of which is due to reducing the number of precincts. Clerk Orr said that his area had taken all the furlough days, and his employees were resentful of those departments which hadn’t. He also complained about other elected officials in the County who were paying much higher salaries to employees in grade 24 than he was. He feels the Board should look into this. Finally, he noted that his suburban offices were bringing in more revenues than in the past, and he is concerned that people will be discouraged from going there if the County institutes the proposed parking fees. He is also concerned about employees having to pay them.

-- reported by Priscilla Mims

November 9, 2011 - Budget Hearings - Health and Hospitals System

The Cook County Finance Committee held this hearing to again review the budget for the Health and Hospitals System that is included in the proposed 2012 Executive Budget. Dr. Raju, CEO for the System gave a brief overview of the budget request which now stands at $894m. Dr. Raju stated that he is hopeful that there will be no further cuts to this request as this budget is necessary to carry out the strategic plan for the system which will put in place the infrastructure to maximize future revenue collection and in future years will decrease the systems dependence on subsidy from the county. He stated that his financial staff worked closely with the President's office to reach the present compromise on the $894m budget.

Commissioner questions focused on revenue concerns - why the system continues to be unable to collect patient fees in a timely and efficient manner. There continue to be issues with multiple contractors doing billing for different types of fees and coordinating the efforts has been an ongoing challenge. Physicians have not billed for their services until recently so this is a cultural change within the system and providing the software and training to facilitate this process is now underway. State reimbursement for Medicaide continues to be problematic. Dr. Raju expressed his commitment to ensuring that the revenue collection system will be optimized and that fees will be collected from those patients who have an ability to pay. He also stated that he is committed to reviewing all contracts with outside vendors to ensure that they are necessary. He would like to have as many of the system functions be internal as possible.

Another area of concern for the commissioners was HR with questions focused on vacant positions, hiring, and layoffs. There was also discussion of how personnel within the system were deemed essential so that they were not required to take the unpaid furlough days. Dr. Raju said that they needed to work out a system of sharing more equitably if furlough days were going to be required but most of the employees within the system belonged to unions that had not agreed to the furlough days. There was discussion of the President's offer to the unions to take 6 unpaid holidays to mitigate the number of layoffs - but it was uncertain if the unions would agree to this. Andrea Gibson, CC Budget Director, was asked how much money could be saved if no raises were given in 2012 and she stated that it was about $50m. Hiring within the system continues to be challenging and Deborah Tate, head of HR for the system, reported that over the last year 235 persons had been hired - but as she explained the number it included 163 medical students, 44 physicians, 61 people at Cermak, and 40 nurses who had been "processed" including 23 internal candidates - so the numbers did not seem to add up. There are union regulations about filling vacancies, displacement, bumping and layoffs that need to be considered in hiring. Ms. Tate stated that the displacement process involved with the changes in personnel needs as a result of the strategic plan should be completed by November 30.

Other issues raised were:

• need to reinstate rape crisis counselors in Stroger ER ($275,000)
• ensuring that clinics throughout the county are not being closed - according to Dr. Martinez they are not
• phasing in the change of MH2 positions to licensed MH3 positions at Cermak so as not to be disruptive to the patients - and providing training for MH2s who want to become licensed MH3s
• need to increase funding for Access to Care, a suburban program that provides access to primary care physicians for the uninsured

Dr. Raju and has staff provided answers to the commissioners on the issues that they raised. Dr. Raju, who has only been in his position of CEO for 1 month, assured the committee that he is dedicated to improving the revenue stream of CCHHS and he will be vigilant in monitoring contracts in the coming year. He also stated that the system will need to tweak its financial model as health care reform continues towards 2014. Since very little specific information relating to numbers was discussed in this three hour session it was unclear to the observer whether amendments to this part of the budget would be forthcoming.

Cynthia Schilsky

LWVCC Observer

Health and Hospitals System Special Board Meeting - September 16, 2011

The HHS Board met in a special meeting to discuss the proposed 2012 HHS Preliminary Budget. Dr. Mason, Interim CEO, began the presentation by stating that the budget that has been prepared to present to the President has proposed revenues of $315m less than proposed expenditures. Since this will need to be justified to President Preckwinkle and the CC Board he outlined the core goals from the Strategic Plan that provide the basis for the proposed budget. Dr. Mason stated that the system intends to continue to shift from an inpatient model of care to an outpatient model and work on employee satisfaction issues.

Since personnel is a significant part of the budget the number of positions in the budget became the focus of discussion. At the present time there are 839 vacant positions - which are being left in the budget - and an additional 343 positions are being added across the system. In the budget as presented these positions are budgeted at 0.2 FTE for salary purposes. Dr. Ansell wanted to understand if this meant that the intent was only to fill 20% of these positions. Dr. Mason stated that the amount for salary to fill these positions was $12.9m and that was the limit for hiring for vacant positions. Director O'Donnel wanted to know what the prioritization was for filling vacant positions, which led to a discussion of whether money was determining the direction of the system or there really was a strategic plan that determined how to allocate money to execute the plan.

Mr. Carvalho then made what he felt were introductory remarks that probably should have started the meeting. He stated that the budget process this year is on a different timeline than it has been in the past due to several transitions - a new CC President, a new HHS CEO, a different menu of taxes for funding the county, and the desire to approve the CC Budget prior to the beginning of the fiscal year on December 1. HHS budget personnel have been working with the President's office to establish a timeline so the President will be able to pull together her proposed budget to present to the CC Board. What is being presented at the meeting is still a work in progress that will continue to be refined. Three public hearings are scheduled for next week and this budget is being presented to the commissioners at their next board meeting for comment.

Mr. Ayres, Interim CFO, presented these comparison summary numbers for the 2012 budget:

Proposed budget for 2012

Appropriations $937.6m Revenues - $610.0m Difference ($327.6m)

Budgeted in 2011

Appropriations $911.8m Revenues - $638m Difference ($273.8m)

Actual in 2011 (anticipated)

Appropriations $911.8m Revenues - $548m Difference ($363.8)

There was also discussion of the Price/Waterhouse/Coopers contract which is due to end in June of 2012. In the 2012 budget it shows as an expense of $17.5m. Dr. Mason stated that most deadlines for replacing PWC had been missed and there was a definite need to plan for what will happen when their contract ends and the county needs to perform the duties that this contract has provided for.

Dr. Mason further stated that there is a fundamental problem in HHS handling their mission of providing care to all and being fiscally responsible, for there is no such thing as "free medical care", and providing free care to those who cannot afford to pay will continue to be a challenge.

Mr. Batts, HHS Board Chairman, wanting to wrap up the 2 hour discussion, stated that while this was not a budget that the board was happy with it was perhaps the best that management could do at the present time. Mr. Carvalho then made a motion that the board approve the following process for moving forward with the budget process:

1. Present the budget as they have it now as the Proposed 2012 HHS Budget to the CC Board on Sept. 20 at their board meeting for comment
2. Hold 3 public hearings on this proposed budget next week as scheduled to get public comment
3. Vote on a final revised version of the 2012 Proposed HHS Budget at the HHS Board meeting on Sept. 28
4. Submit the final version of the 2012 Proposed HHS Budget to the CC Board for their approval at the October 4 CC Board Meeting

The motion was approved with Director Golden voting present. Mr. Carvalho stated that the HHS budget needs to be completed before the President can proceed with the rest of the budget process. The meeting adjourned at 10am.

Cynthia Schilsky

LWVCC Observer

Cook County Health and Hospitals System Board Meeting - August 26, 2011

The Cook County HHS Board Meeting was called to order at 7:40am by Chairman Warren Batts. Public speakers presented concerns with inadequate nursing staffing, need for restoration of dental services, concern over the termination of 34 Mental Health Specialist 3 positions at Cermak Hospital, and concern over the closing of Oak Forest Hospital.

Mr. Carvalho, Chairman of the Finance Committee, indicated the proposed 2012 HHS budget that the board needs to present to President Preckwinkle for her Executive Budget is not yet complete, and therefore not ready for approval by the board at this meeting. He also stated that Mr. Ayres, the CFO for HHS, has resigned effective the end of August. A contract for Mr. Ayres services on a part time basis for 3 months to facilitate the transition to a new CFO was presented for approval. After some discussion of the reasons for offering this contract, the vote on the contract was deferred until further discussion in closed session.

Mr. Batts stated that he had attended the Certificate of Need hearings concerning the closing of Oak Forest Hospital and praised President Preckwinkle for her commitment to facilitating the process for finally getting approval for the closing. The opening of the Specialty Care Clinics at Oak Forest is scheduled for Sept. 1 and he stated the board would need to follow up on how the change in operation of Oak Forest impacts health care in the southern suburbs.

Dr. Mason, interim CEO, distributed copies of the STAR Report that was submitted to the President's office. He explained that it was part of the President's push for performance management and they will be held accountable by the President's office. HHS will also need internal meetings on how to meet the metrics that have been established. The report includes 95 measures which the Boston Consulting Group helped to define. Mr. Carvalho raised concerns about the measures used which led to a discussion among the board members on what should be measured and how to go about doing that. This also included discussion of how to use consultants, what is involved in standards for patient safety and quality control, and what is the future of health care in Cook County and how is it planned for.

Dr. Mason also announced that a RAMA (Random Area Medical Access) Event was held at Malcolm X College on Aug. 19-21. This was a free medical clinic sponsored by an outside group with assistance from Cook County. About 2000 people were seen and provided with optometry services and glasses, dental services, primary care and women's health services.

Mr. Ayres presented his report on the difficulties in presenting a balanced budget for HHS. There are supply chain problems that include an inability to fill open positions. Operations problems include the challenge of managing overtime due to inadequate staffing and the silo reporting structure within the system results in inefficiency. The fundamental problem as he sees it is the payor mix. If you take care of people who are unable to pay, the money has to come from somewhere. Again there was discussion of the use of contractors and how they are used, instead of having Cook County employees do the work that the contractors are doing. Dr. Ansell suggested that they need to spend more time discussing this issue.

At 9:50 the board went into closed session for discussion of human resources issues and returned to open session at 11:05am. Upon returning to open session they voted on Mr. Ayres contract which was approved. The meeting adjourned at 11:12am.

Cynthia Schilsky, Observer