Budget woes at Cook County health system threaten insurance program used by more than 300,000 residents
Friday, June 21, 2019
by Juan Perez Jr
Stroger Hospital in 2018. (Nuccio DiNuzzo / Chicago Tribune)
Cook County’s health care sy stem faces an enormous and growing backlog of unpaid expenses that could become “too large to pay” without a massive infusion of new funding, according to a county watchdog investigation released Friday that raises questions about the viability of an insurance program used by hundreds of thousands of residents.
The report from county Inspector General Patrick Blanchard’s office challenges the budget practices and finances of the Cook County Health system and its massive insurance program known as CountyCare.
Unpaid bills have prompted some health care providers to refuse service to members of the Medicaid-backed county insurance operation, the report said.
And there has been a shortage of pacemakers and surgical anesthesia in the system that operates major institutions including Stroger Hospital and Provident Hospital in Chicago, because some contractors have placed the county health system’s accounts on hold due to a lack of payment.
Blanchard concluded CountyCare doesn’t generate enough money to pay all of its health care expenses by the end of its annual budget cycle. That forces the insurance system to pay off old bills each year while also dealing with new costs.
"These expenses are steadily growing and could become too voluminous to manage without an extraordinary contribution from another funding source in the future,” Blanchard’s report said.
The health care system operates independently of the Cook County government, though the county funds a substantial portion of the system’s nearly $3 billion annual budget.
In response, the county hospital system rejected many of the IG’s conclusions, while saying officials needed more time to review Blanchard’s report.
"We are absolutely confident in the integrity of the program and will respond in a comprehensive manner in time,” county health officials said in a statement.
“In an initial review, it appears that the (inspector general) lacks a basic understanding of how the health system is structured which makes it difficult to believe the office has a deep understanding of something as complex as Medicaid,” health system officials said.
County board President Toni Preckwinkle said her administration would review the findings and determine next steps.
"We pride ourselves on fiscal responsibility and management and hold the same standard for all county agencies,” Preckwinkle said in a statement.
The health system’s CountyCare insurance program serves more than 300,000 people, making it the largest Medicaid insurance provider in Cook County — larger than Blue Cross Blue Shield, according to the Civic Federation.
The program has grown dramatically under the federal Affordable Care Act. Still, the vast majority of CountyCare members elect to receive care from providers outside of the county hospital and clinic system. That means most of the revenue the insurance program collects leaves the system.
Blanchard said CountyCare had more than $700 million in “outstanding liabilities” at the end of the 2018 budget cycle, with $500 million owed to outside creditors.
In fact, Blanchard said the health system has previously consumed all of an entire fiscal year’s budgeted revenue within months due to outstanding bills.
The health system also “routinely changes revenue and expense figures” between its operations in order “to reach desired financial goals for CountyCare and Stroger Hospital in CCH’s monthly and annual financial reports,” Blanchard said.
Those practices, the IG said, make it difficult for county commissioners and the health system’s board to evaluate performance.
County officials said earlier this week that the Cook County Health and Hospitals System faces a $103 million budget gap. Officials blamed the deficit on a backlog in state Medicaid application processing and former Gov. Bruce Rauner’s administration.