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Cook County ices health merger with Chicago

Monday, October 10, 2011
Crain's Chicago Business
by Kristen Schorsch

Cook County leaders are saying “no thanks” to a merger of public health operations with the city of Chicago, potentially setting up a showdown between Rahm Emanuel and Toni Preckwinkle as they scramble to slash costs to close massive budget deficits next year.

The mayor and the Cook County Board president have touted joining forces as an innovative way for their cash-strapped governments to cut spending, promising millions in annual savings by teaming up to purchase supplies and hire contractors. So far, just $11 million in cuts have been identified for 2012, and the big prize, consolidating a tangled web of public health services, has eluded two of Chicago's most powerful politicians.

“There's very little overlap in what the city does and what the county does,” says Warren Batts, chairman of the independent board that oversees the Cook County Health and Hospitals System. “I'm not so sure you would save any significant dollars” by merging services.

Mr. Emanuel would have the most to gain from a merger. The mayor, who has said that the city is facing a nearly $636-million operating deficit next year, is expected to release his 2012 budget this week. The city could save nearly $34 million a year by getting out of public health altogether and handing the county its responsibility of tracking outbreaks of infectious disease and running prevention programs for AIDS and other illnesses.

City public health operations seemingly would be better suited to the Cook County health system, which is one of the largest public systems in the nation, with a $921.9-million budget in the fiscal year ending Nov. 30. The goal would be to create a single public health department covering both the city and suburban Cook County that could improve services while operating at lower cost.

Yet it's a deal Ms. Preckwinkle cannot afford, no matter how sound a merger might be as a matter of public policy. She has pegged the county's deficit at $315 million next year and already is at odds with Mr. Batts and the independent board over their request for a $283-million subsidy, 14% more than she has said she will allow, for next year.

A merger would require the Cook County Department of Public Health to swallow up its much larger city counterpart. Not including grants, the county department has a 2011 budget of $17.7 million, compared with $33.7 million for the city department. “To take a $34-million budget and just absorb it is not a fully fleshed-out idea,” Cook County Budget Director Andrea Gibson says.

MISMATCH

In addition, the city runs health programs funded this year by grants totaling nearly $154 million, 10 times what the county health system receives.

She says county officials have focused on finding savings that would take effect next year, although they continue to look at ways to cut costs by consolidating operations with the city.

But even smaller proposals are moving ahead slowly.

In June, a report commissioned by the city and the county outlined ambitious plans to collaborate to save up to $140 million a year, not including public health savings. The report recommended an immediate merger of pharmacy and mammography services and consolidating one city clinic into a county clinic as part of a pilot program. None of those steps has been taken, and an updated version of the report set no timetable for their completion.

“It's going on in the planning area, but I'm not sure how aggressively either of us are doing that right now,” Mr. Batts says.

Combining public health operations only would add to the county health system's financial woes, some say.

“It might be a good idea, but not for financial reasons,” says Patrick Lenihan, executive director of the Public Health Institute of Metropolitan Chicago, a Chicago-based non-profit. “They can't save a lot of money.”

A spokesman for Mr. Emanuel says the city continues to discuss public health collaboration with the county. The city also plans to team up with non-profit clinics to save money, he adds.



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