Cook Health Eyes $200M

The Cook County Health and Hospital System plans to issue up to $200 million of debt over the next five years to finance a new capital plan.

The HHS is third-largest public health system in the U.S. and accounts for about one-third of Cook County’s $3 billion budget.

A 2008 law shifted its day-to-day governance to an independent board. The new board has spent the last year crafting a strategic vision that is intended to guide the fiscally and politically challenged system through a series of reforms, including the new federal health care law, chief executive William Foley said during a luncheon address Monday in Chicago.

The plan focuses on improving HHS’ reputation, stabilizing its financial position, expanding its outpatient work while decreasing its inpatient services, and forming partnerships with other Chicago-based institutions, such as the University of Chicago.

“We have a five-year financial plan,” Foley said. “Some of the funding is already allocated, but essentially we’re requesting [from the county] capital funding of $200 million, or $40 million a year.” 

The $40 million of annual borrowing would likely be considered in each yearly budget, he added.

The system is bracing for a decline in federal funding due to the new health care law, Foley said.

The county’s hospitals, like most urban safety-net providers, rely heavily on so-called disproportionate share funding, which is set to drop dramatically after 2014.

However, officials expect to see up to 600,000 of newly insured patients under the law, which would put a big dent in $500 million of annual uncompensated care costs, he said.

The new law will likely mean more patients will have a choice of providers, and that means the system must improve its clinical and customer services to retain the patients, Foley said.

“The worst-case scenario would be we lose federal funding and we lose patients,” he said. 

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