County needs Rx for more than half a billion dollars in unpaid charity health care down the road

Cook County’s top health official said Tuesday the county can’t keep providing health care with no reimbursement, sounding the alarm on a problem so severe that funding for charity care is expected to run out next year long before the year is over.

At a budget address before the Cook County Board of Commissioners Tuesday, Cook County Health CEO Dr. John Jay Shannon said there’s “no question” that the biggest challenge to the health system’s success next year is going to be meeting the demand for uncompensated care because people “naturally gravitate” to the county health system when they lack insurance.

“We don’t have the ability to print money to pay for the services that we do,” Shannon said.

For fiscal year 2020, the county expects uncompensated care — medical services the county provides but for which it is not paid — to grow to about $590 million.

That number is expected to continue to grow because money the county receives from federal payments from programs such as the Disproportionate Share Hospital and the Benefits Improvement and Protection Act aren’t keeping up with the charity care the health system is legally required to provide.

The county’s health operation provides a greater proportion of charity care than others in the state, Shannon said.

The CEO also said for 2019, the health system spent $1 million a day in expenses such as salaries, equipment and supplies linked to providing that charity care. If it continues on that pace, in 2020 the health system could run out of funding for its charity care services by September. The health system is also slashing 638 positions, with 447 of those coming from the ambulatory services section of the health system.

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“As we contemplate how we go forward, the challenge that we have is a challenge at a policy level at, frankly, the state and the federal level: Are we going to find a way to get universal coverage for health care? Until we find that way, people, as you can see, naturally gravitate toward the health system,” Shannon said.

“And as you can also see, and we’ve got plenty of data to support this, other hospitals in the county clearly are discharging people today who have stabilized but who do not have insurance for follow-up care to Cook County, and so they look at us as the solution and that’s not right and we don’t have the funding for it.”

Revenue from the county’s managed-care program CountyCare has helped. As membership continues to grow, the health system may see an increase in its revenue but that all depends on how fast Medicaid applications can be processed at the state.

Shannon said the system won’t turn anyone away, but the monetary effect could mean delays, doctors not having the necessary equipment for procedures and “tough choices,” which could include evaluating whether services can be provided.

While making the rounds with her proposed budget earlier this month, Cook County Board President Toni Preckwinkle also voiced concerns about the amount of uncompensated care, saying there was no “magic wand” to fix the “fiscal challenge.”

“If I had a magic wand I’d fix it,” Preckwinkle said. “How we’re going to [address uncompensated care] is complicated and difficult and it’s truly something we’re going to work on this year.”

Commissioner Deborah Sims, D-Chicago, called the situation “scary” and said it could force people who need care to wait until the health system can figure out how to provide it.

Shannon called that a “classic dilemma.”

At a speech before the City Club Monday, Shannon said the budget he’d present Tuesday would be the “most challenging” of the budgets he’s brought to the board in his six years as the head of the health system.

“At the end of the day, I would submit that this is a moral challenge for the country,” Shannon said. “We’re not going to be able to take care of charity care by doing a better job only with our revenue cycle. We have to get people covered, whether that’s a state initiative or a federal initiative, it’s an astonishing stain on our country that the wealthiest country in the world, at the wealthiest time in history, still has one in seven residents without health care coverage.”