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Company continues fight to close South Side hospital

Monday, Dec 21, 2020

* January

Four struggling South Side Chicago hospitals plan to merge into a single health care system with one new, state-of-the-art hospital and a network of community health centers under a $1.1 billion plan announced Thursday.

Advocate Trinity Hospital, Mercy Hospital & Medical Center, South Shore Hospital and St. Bernard Hospital — serving some of the city’s most impoverished communities — had been negotiating the transformation since last year, guided by the Illinois Department of Healthcare and Family Services, overseer of the Medicaid program poorer patients rely on.

* May

Four struggling South Side hospitals that had tentatively agreed to combine into one health care system are abandoning their billion-dollar plan after hospital officials say state legislators failed to approve crucial funding. […]

Hospital officials asked for a total of $520 million over five years from the state. That support would have funded a significant portion of the $1.1 billion plan, which also would have finances through existing assets, private philanthropy and future operating revenue. […]

“In this moment, with so many things in flux with our state budget, it was nearly impossible for the General Assembly to go forward with a billion-dollar program,” Gov. JB Pritzker said at an unrelated press conference Wednesday. “I know that timing makes it very, very difficult for those hospitals.”

The lack of funding likely will force hospitals to close or cut more services, officials said in an open letter to Theresa Eagleson, director of the state’s Department of Healthcare and Family Services.

Also from May

Members of the Illinois Legislative Black Caucus expressed concerns about the plan. Democratic Rep. Marcus Evans of Chicago says he didn’t oppose the project, but felt the hospitals didn’t provide enough detail about their plans.

* December 7th

Protesters on Monday blocked a street outside the Thompson Center and called for city and state officials to block the planned closure of Mercy Hospital, which, they say, would result in deaths in the Black community that it serves.

“We’re asking that the governor as well as the mayor do what needs to be done to make absolutely sure that this hospital stays open to service the Black community,” Robert Jones, pastor of Mt. Carmel Baptist Church, said during the protest.

* And then

At the conclusion of a “long and brutal” meeting, the six-person Illinois Health Facilities and Services Review Board unanimously voted this week to deny the hospital’s proposal. Following Tuesday’s decision, Mercy Hospital executives have 14 days to appeal, as well as the opportunity to present the board with a new plan.

“I do not believe Mercy has made a reasonable case that [withdrawing] their services will not have an extremely negative impact on the South Side of Chicago,” board member Dr. Linda Rae Murray said before casting her “no” vote Tuesday.

* But, this is from the Kenwood Oakland Community Organization…

Even with a ruling by the Illinois Health Facilities and Services Review Board that blocks the imminent closure of Mercy Hospital, hospital executives are planning to pursue their shutdown plan. Ultimately, Mercy could take the state to court, or the hospital could just close and be fined. The fine is $10,000, plus another $10,000 for every 30 days the hospital stays closed without permission from the board.

* The hospital’s finances are looking up this year, but are not so great overall

The transformation plan was developed due to significant changes in MHSC’s health care environment, including substantial declines in both inpatient and outpatient volumes, and cumulative deficiency of revenue over expenses at the Hospital and Medical Center totaling $303.2 million over the last seven fiscal years. […]

The Hospital and Medical Center recorded operating revenue of $275.6 million and excess of revenue over expense of $4.1 million, aided by significant state and CARES Act funding, for the year ended June 30, 2020. During the year ended June 30, 2019, the Hospital and Medical Center recorded operating revenue of $238.5 million, and incurred a deficiency of revenue over expenses of $36.4 million.

If you take a look at this recent audit, you’ll see that the not-for-profit holding company has billions in net assets.

* Closing with a KOKO press release excerpt from today…

“We’ve lost four hospitals from the Black community in the last four years,” [Jitu Brown, national director of the Journey for Justice Alliance] said. “And we’ve seen in this pandemic the huge disparity in access to health care that has left our communities fighting to breathe. We need more health care, not less. And we need it now more than ever. Gov. Pritzker represents us, not Trinity. We expect him to follow through on his earlier statements and make sure his administration keeps the doors of Mercy Hospital open.”

In a letter to Trinity’s CEO, Michael Slubowski, Illinois Gov. J.B. Pritzker had noted that Trinity’s other three hospitals operating in the state will net more than $75 million in state aid.

“I implore that you reconsider your decision to close Mercy Hospital and that you work diligently with any potential interested parties who are capable of taking over the operations of Mercy for a health care purpose,” Pritzker said in the letter.

- Posted by Rich Miller        

  1. - Blue Dog Dem - Monday, Dec 21, 20 @ 2:53 pm:

    …..holding billions in net assets. Seems to be trend here.

  2. - DuPage Saint - Monday, Dec 21, 20 @ 3:39 pm:

    Seems like maybe some of that billions they hold should be given back to make them truly non profit
    It is way above me but I think non profit and TIF should really be looked at again and perhaps be adjusted

  3. - Frank talks - Monday, Dec 21, 20 @ 3:41 pm:

    $10k fine, then $10k every 30 days. How long can they continue to get fined?

  4. - 1st Ward - Monday, Dec 21, 20 @ 3:48 pm:

    “If you take a look at this recent audit, you’ll see that the not-for-profit holding company has billions in net assets.”

    This statement is very misleading. We are talking about Mercy Hospital not Trinity. The audit shows the operating entity Mercy Hospital has $96MM in assets and >$200MM in liabilities ($76MM in long term debt) (page 60). The majority of Trinity’s assets are with BayCare which is the only entity that Trinity owns >50% of. The JV agreement that MHSC has with Common Spirit may dictate who has final say over closing. I don’t believe you are advocating that Trinity liquidate BayCare assets to save Mercy which would create countless litigation with multiple parties increasing expenses that would otherwise go to services.

  5. - Earnest - Monday, Dec 21, 20 @ 4:07 pm:

    Keep in mind on the balance sheet at the end that for a nonprofit depreciation is just a paper expense, so they did about $371,000 better last year than it would appear.

  6. - Precinct Captain - Monday, Dec 21, 20 @ 4:11 pm:

    Mercy and the others can whine and complain they didn’t get subsidies for their “plan,” but their “plan” wasn’t much of anything but hot air. No idea where facilities would be or would stay open or closed, impossible to map patient access and care options. Now, the closing of Mercy is clear retaliation. Tell me, does that measure up to the stated mission and values?

  7. - Non Profit - Monday, Dec 21, 20 @ 4:22 pm:

    “a nonprofit depreciation is just a paper expense”

    Anyone that operates a non-profit with that mindset is exceptionally naive.

  8. - 1st Ward - Monday, Dec 21, 20 @ 4:44 pm:

    “Now, the closing of Mercy is clear retaliation”

    They said they would close if the merger wasn’t approved. That’s not retaliation.

    “No idea where facilities would be or would stay open or closed, impossible to map patient access and care options”

    Not knowing the amount of subsidies they would receive from the State given the State’s financial issues probably influences their decision making on all of these items. Having a hospital in an area of the city that’s losing people and thus patients doesn’t bode well for the viability of said hospital especially one that is 150+ years old and struggling to turn a profit and has a mountain of debt.

  9. - Rasselas - Monday, Dec 21, 20 @ 8:33 pm:

    If the legislators would stop with the theater of street protests and instead just pass a bill that required a system to show that the SYSTEM was in financial distress, not just an individual hospital, this problem of systems closing their hospitals in poor areas while growing fat off of their hospitals in wealthy areas would go away.

Sorry, comments for this post are now closed.

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