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Rx for MetroSouth

Tuesday, December 15, 2009
Chicago Tribune
by Chicago Tribune editorial staff

Last year, a New York-based investment group took a risk: It rescued St. Francis Hospital in Blue Island from oblivion. The new owners -- led by Transition Healthcare LLC -- changed the hospital's name to MetroSouth Medical Center. They promised to revive the hospital by being more nimble and responsive than the competition.

The hospital has opened new clinics in the area and expanded access to care. But it has also struggled; it laid off 10 percent of its employees in September.

Dr. Enrique Beckmann, the CEO of MetroSouth, says the hospital is only "breaking even" in its operating budget. And that doesn't include the millions it has invested in upgrades and new neighborhood clinics.

So MetroSouth wants Cook County to cut its property tax bill by 60 percent. That tax break could save the hospital an estimated $1 million a year for the next decade.

Cook County Board member Joan Patricia Murphy, D-Crestwood, co-sponsored a narrowly written measure that would pinpoint MetroSouth (and perhaps one other hospital, Weiss Memorial in Chicago's Uptown neighborhood) for a tax break. She says it is "truly important" for the region.

The board is scheduled to consider the proposal Tuesday, but Murphy told us Monday that she'll defer the proposal so the county, the hospital and Blue Island officials can work out details.

The County Board should ditch this tax break.

Don't get us wrong: We we'd like to see MetroSouth thrive. The Blue Island area needs a good hospital.

But this is special-interest legislation. It would give this hospital an advantage over any competing for-profit hospital that doesn't get a tax break.

Murphy is seeking a very generous reading of a tax incentive program that has been run by the county since 1978. That program is designed to lure industrial and commercial development in struggling communities, according to the Cook County assessor's office. There's supposed to be a "but for" test -- that is, but for the tax incentive, a business would not locate and hire here.

That's not the case with this hospital. Transition Healthcare made the decision to buy and run the facility.

There are a lot of distressed hospitals in the Chicago area and around the state. The Illinois Hospital Association estimates that more than 30 percent of the state's hospitals are losing money.

Transition is a for-profit company that took on a faltering hospital. It knew the risks and potential. Like every company, it needs to find a way to run a lean, efficient, profitable operation. It has not justified a special tax break from the County Board.

If the county doesn't go along with the tax break, Beckmann says, the hospital will "have to revisit every budget item and find ways to offset the higher costs of the real estate tax."

A lot of companies are going through the very same thing.


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