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Hospitals unhappy with proposed 'hospital tax'
COUNTY BOARD | Moreno wants them to pay for failing to meet free care goals

Saturday, November 14, 2009
Chicago Sun-Times
by Lisa Donovan

With Cook County commissioners expected to roll back the sales tax a half penny on the dollar -- and make it stick this time -- a simmering discussion may very well boil over about a proposed hospital tax, as one group calls it, to continue delivering health care to the poor and uninsured.

The debate pits Commissioner Joseph Mario Moreno, a Democrat whose district largely encompasses the Southwest Side, against hospitals in Chicago and the suburbs.

Under the legislation Moreno sponsored, larger nonprofit health-care facilities would be subject to what he calls a "fee," but sounds more like a penalty, if they do not provide free care to the poor or uninsured equal to 4.5 percent of the hospital's annual expenses.

Moreno is concerned that revenue losses from a potential sales tax rollback would hurt Cook County government, a $3.1 billion operation with roughly $850 million going to the county's health-care system this year.

"This is to discourage hospitals from referring patients who have no ability to pay to the public health system," driving up the county's medical tab, Moreno said. He estimated that half of the 1 million people who go through the county's health-care system each year aren't insured and don't qualify for Medicare or Medicaid.

Moreno says his proposed ordinance is particularly important now as unemployment climbs and, along with it, the number of uninsured.

Kevin Scanlan, president and CEO of the Metropolitan Chicago Healthcare Council, a trade and lobbying group, fired back: "It appears the commissioner wants to replace one tax with another tax, and that's on hospitals."

His trade and lobbying group, which represents 94 hospitals in an eight-county region, says Cook County can't legally impose an occupational tax.

"This could be the straw on the camel's back that could cause them to close," Scanlan said, noting that at least one Chicago neighborhood hospital could be shuttered because of the requirement.

On the backs of struggling hospitals, the "tax" would generate $340 million annually, according to the hospital group.

"That's all baloney,'' says Moreno. He stresses that if the hospital's charity care matches that 4.5 percent, they won't have to write a check to the county at all.

"We have legal opinions, and they say we can do it."

Moreno also explains the threshold would be lower -- 2.3 percent -- for so-called "safety net hospitals," smaller community hospitals such as St. Bernard and St. Anthony, operating in Chicago's inner city, that are already helping fill in the health-care gap by providing care to the indigent.

"Most if not all safety net hospitals meet or exceed the 2.3 percent requirement," he said.

"It's incumbent on the larger hospitals ... to help us to alleviate the stress."

The measure is in the County Board's Finance Committee. Moreno said a public hearing will be held before it comes up for a vote -- as early as January, a month before the Feb. 2 primary election.

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