An unwelcome surprise from the Cook County health system
Monday, July 14, 2014
CountyCare — that's Cook County's attempt to leverage federal dollars through a Medicaid managed care program — is in a heap of trouble. Expenses outstripped revenues by $21 million in the first six months of the county's fiscal year, through May 31. The shortfall is expected to grow to $63.5 million by the end of the fiscal year, Nov. 30. That's driving a projected $85.9 million shortfall in the 2014 Cook County budget.
Next year looks grim, too: Cook County Board President Toni Preckwinkle projects a $168.9 million deficit for the county in fiscal 2015, which starts Dec. 1, including a $50 million deficit in the health care system.
Meanwhile, the independent board that runs the county health system conducted a supposed nationwide search for a new chief executive and found its leader ... on its doorstep.
That would be Dr. John Jay Shannon, who has been interim boss since Dr. Ram Raju — the architect of CountyCare — decamped for New York in March.
Shannon, who was hired by the Cook County health system last year to lead the office of clinical integration, resigned under pressure in 2012 from his last job at Parkland Hospital in Dallas. The U.S. Centers for Medicare & Medicaid had found in 2011 that Parkland's patients were in "immediate jeopardy" of injury or death because of unsafe hospital conditions.
Shannon had worked for the Cook County system before he went to Parkland. County health officials say they're confident that Shannon had a hand in resolving problems at Parkland, not creating them. But shortly before he left Parkland, monitors placed there by the federal government had faulted hospital leaders for a weak turnaround effort.
All this suggests is that it's time for a critical reassessment of the management of the public health system here.
We have been fans of the independent operation of that system — it sure looked like a good idea when it stripped control of health care from the inept regime of former County Board President Todd Stroger.
But the financial failings of CountyCare and the questionable hiring and elevation of Shannon ought to force everyone to ask: What's going on here?
Shannon and the governing board run by Chairman David Carvalho have two big things to prove.
First, that Shannon can run a safe, efficient health system.
Second, that creating the independent board wasn't a mistake. It's supposed to be free of political meddling. It's not supposed to be free of accountability.
Preckwinkle can't force the board to operate more efficiently, but she is expected to come up with the cash to cover its deficit. She and taxpayers, that is.
Raju started a major restructuring of the health system to boost patient care and reduce the demand on taxpayers to subsidize that health system. It held great promise.
But health officials say CountyCare is running unexpected deficits.
Why were they blindsided? Shannon tells us that "the population that we're taking care of was truly terra incognita," meaning it was difficult to predict how and when these newly insured patients — many with serious, untreated chronic conditions — would seek care. The county also hired more staff to meet demand.
And why didn't the independent board move immediately to sharply control costs as soon as it saw spending was higher than anticipated?
CountyCare was designed to bring in an early haul from the federal government as the Affordable Care Act provided Medicaid eligibility for more people. It did bring a haul: The county reaped $137 million for the more than 90,000 CountyCare patients in the first six months of fiscal 2014.
Those patients were required to use CountyCare clinics and other facilities. That will change in January, when those patients will be free to enroll in other health plans and choose other providers.
That creates an unknown: CountyCare treatment is costing more than expected, but if too many patients leave CountyCare, the public health system could wind up treating only those patients with the most complex, expensive health issues, including many who have no insurance. The financial picture could get even worse.
"We have a health system that has not always kept up with developments, the use of technologies, different things to help us be more effective," Shannon tells us. "We've been on an old-fashioned model, an old chassis. We need to change that so we have more effective and efficient clinical operations."
Shannon has the opportunity now to do that. If he doesn't succeed, taxpayers are going to be left feeling pretty sick.