Cook County Health in Chicago faces huge deficit

John Jay Shannon, M.D., was named chief executive officer of the Cook County Health and Hospitals System in Chicago less than three weeks ago, and he is already charged with finding $67 million in savings in the next four months, Crain's Chicago Business reported.

"The county health system has to treat everybody who shows up," H. Woods Bowman, a former Cook County chief financial officer, told Crain's. "That's a very unpredictable number, and the revenues are very hard to predict."

The public health system, which operates two hospitals and several outpatient clinics, accounts for the large majority of the county's $86 million year-end budget deficit, according to Crain's. That's connected in part to a high demand for services from new enrollees in CountyCare, the healthcare system's new Medicaid managed care plan.

Although CountyCare has been a huge source of new revenue for the system and its enrollment may double to 200,000 over the next year, it may have to pay back the federal government as much as $33.5 million in Medicaid funds it did not use, and face another $29 million in reimbursement cuts. And when it began operations last year, it was expected its enrollees would be sicker than the rest of the county's population.

Altogether, officials project Cook County Health and Hospitals will bring in $1.19 billion in revenues in 2014, but its operating expenses will likely reach $1.44 billion, according to the article.

Cook County expects to make systematic changes rather than cut jobs or services. It will focus on steering more patients toward preventve care in order to reduce their long-term costs, and mailing pharmaceutical prescriptions in three-month increments rather than monthly, cutting down on shipment costs.

In 2007 and 2011, the county engaged in steep budget cuts that included layoffs at county-operated Provident Hospital, as well as restricting its emergency room to visits from ambulances. Three physicians who lost their jobs at the hospital sued for wrongful termination, collecting a $2.6 million settlement.

To learn more:
- read the Crain's Chicago Business article