Cook County Health Leaders Could Lose Nearly $6 Million In Severance
Wednesday, January 23, 2019
by Krstin Schorsch
Fifty-five people who work at the Cook County-run health system could receive a total of nearly $6 million in severance pay if they were let go without cause. Now that perk is at risk of ending.
Two Democratic Cook County Board Commissioners, Larry Suffredin and Bridget Degnen, want to change the severance policy at the health system, the only place in county government that offers such a benefit.
Meanwhile, their proposal has County Board President Toni Preckwinkle’s office planning to ask the county’s top prosecutor, Kim Foxx, to weigh in on whether the county can change the severance policy.
“I’m sure there are individuals who are nervous who have these, but this is an important public policy that I think our board needs to look at because ultimately we’re responsible for the budget and all of the spending that goes on there,” Suffredin said.
The amount of severance the county might have to pay out one day to Cook County Health employees is pittance compared to the county’s $6.2 billion budget, but the health system is under a microscope. Amid financial challenges and a national search for a new CEO, the health system’s own board could lose some key decision-making authority, like having final say over who becomes CEO and how much that person would make. Preckwinkle and county commissioners want that power — and more — instead.
At issue is whether the health system can even legally give people in certain positions severance pay. Suffredin says they cannot, even though there’s a Cook County Health policy on the books since 2009. The system has paid out severance five times since then, a spokeswoman said.
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This all bubbled up because Dr. Jay Shannon, the former Cook County Health CEO, was let go late last year. His severance deal, which was part of his contract, set off a firestorm. Commissioners and even Preckwinkle said they didn’t know about it, even though the health system board discussed the severance policy in public meetings. Shannon was in line for a year’s salary of $517,500, plus health insurance coverage for 12 months, according to his contract.
A routine perk for health care leaders could shrink in county government
Severance is common in health care, a notoriously competitive industry, to help hire top executives who can attract a steady stream of patients. The 55 employees who have severance at Cook County Health are key to the business. They run the day-to-day operations at one of the largest public systems in the nation, according to county records. They include the chief financial officer, chief medical officer, and directors of various pieces of the health system. The group’s severance deals range from $30,000 to about $275,000.
But a 2019 Illinois law capped severance for government workers at 20 weeks pay. Laura Lechowicz Felicione, special counsel to Preckwinkle, said the president’s office plans to ask Foxx, the county state’s attorney, if the county can change the health system’s severance policy for current employees with such deals.
Suffredin said he believes the changes he’s pitching would make existing severance deals moot because the health system board legally didn’t have the power to offer them in the first place. And the county board — not the health system board — would have the final say on severance.
Hill Hammock, chairman of the county health system’s board, defends the severance policy, especially as the county looks to replace Shannon.
“If we change it to 20 weeks,” Hammock said of the policy, “I think it will signal a negative factor to a normal solicitation or recruiting effort.”
Hammock said the firm leading the search for Shannon’s replacement told him typical hospital leaders’ severance deals are at least 12 months.
An important point: Shannon was the only Cook County Health employee who had a severance agreement as part of his contract. The other 55 people were hired under the policy.
Could a pay hike be in store for the next CEO?
Besides offering severance, Hammock also wants to pay the new Cook County Health CEO more than Shannon made. Even some other health system employees make more than Shannon did. Physicians who run the trauma, urology and surgery departments at Cook County Health, for example, make between $530,000 and nearly $560,000 this year, according to the county budget.
And as Cook County looks to woo a top talent to run the health system, pay could be a sticking point.
“We are low in the marketplace, even among safety net hospitals,” Hammock said.
Safety net hospitals mainly treat the poor and uninsured. Cook County Health is the biggest in the area. It has two hospitals, a network of clinics and a Medicaid health insurance plan for poor and disabled people.
The University of Illinois is the only other public hospital in the region. Its CEO, Michael Zenn, makes $572,000, according to the university system.
Most of the private hospitals in Cook County are non-profit, and even CEOs who oversee hospitals smaller than the county health system make more than Shannon did.
Jose Sanchez, who runs Norwegian American Hospital on the West Side in Humboldt Park, made $535,500 in 2017, according to the hospital’s most recent tax return.
Anthony Guaccio is the CEO of Swedish Hospital on the North Side near Lincoln Square, which is now part of much larger NorthShore University HealthSystem. He made $579,673 in 2017, Swedish’s most return tax return shows.
Health systems bigger and richer than Cook County Health pay their CEOs a lot more than Shannon. Dean Harrison, who runs Northwestern Memorial HealthCare, a 10-hospital system, made $6.4 million in 2018, the system’s most recent tax return shows.
Cook County leaders aim to pick a new health system CEO in the next six months.
Kristen Schorsch covers Cook County politics for WBEZ. Follow her @kschorsch.
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