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'Safety-net' hospitals would get extra $600M under plan

Tuesday, January 08, 2008
Crain's Chicago Business
by Mike Colias

(Crain’s) — Hospitals that treat large numbers of poor patients would get an extra $600 million a year in federal money under a plan announced by state and Cook County lawmakers Tuesday.

About that same amount of money already flows from Washington, D.C., to most of Illinois’ 200 hospitals. But the proposal outlined Tuesday would tilt more of it to financially struggling hospitals — mostly in Cook County — that treat the highest percentage of patients under the state-run Medicaid program.

“This plan would be more redistributive, from institutions that have an abundance of resources to those who do not,” said state Sen. Jeffrey Schoenberg, D-Evanston, chairman of a key appropriations committee. He has joined County Board President Todd Stroger and several commissioners in backing the proposal, which needs approval from the County Board, the Illinois General Assembly and the Bush administration.

At issue is how to replace a program that has pumped an extra $1.8 billion in federal Medicaid dollars into Illinois over the last three years. That money will dry up June 30 unless a new one is approved.

The plan outlined Tuesday highlights a growing rift within the hospital industry over how to keep that money flowing — and how it gets divvied up.

The Illinois Hospital Assn. has a competing proposal that likely would spread the wealth among a far greater number of hospitals, though the lobbying group hasn’t detailed its proposal yet.

“This Cook County-based approach really smacks of pitting Cook against the rest of the state,” said Howard Peters, senior vice-president of the hospital association.

Unlike the existing program, this one would funnel money to the county-run health system, which faces a budget shortfall for 2008 of at least $100 million.

The Cook County plan also is backed by a handful of “safety-net” hospitals, including Mercy Hospital on the South Side, and the powerful Service Employees International Union, which represents 7,000 health care workers at those institutions.

Under the plan, all hospitals in Cook County would pay $730 million a year in taxes to the county. That would generate almost $600 million in Medicaid money from the federal government, which partners with states to fund the Medicaid program.

That money would get distributed to hospitals throughout the state, though the bulk would go to hospitals in Cook County. Mr. Schoenberg said federal officials would be more receptive to the plan because it funnels money to the hospitals that need it most.

Mr. Peters said the plan only “throws a bone” to hospitals outside of Cook County and would be a tough sell for lawmakers from those areas. He adds that no other county in the United States has gotten federal approval for such a funding plan.

The County Board is expected to consider the measure at its meeting Wednesday.



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