Illinois state health officials are advising against a complete replacement of Chicago's oldest and largest public healthcare facility, calling its debt financing and project costs excessive.
"To totally rip down a hospital and build a new one doesn't fit into the criteria that's out there," said Thomas Schafer, a spokesman for the Illinois Department of Public Health. "Usually, it's a renovation."
In a report obtained by MODERN HEALTHCARE, the executive staff of the Illinois Health Facilities and Planning Board said it couldn't give a positive evaluation of a $570 million replacement of Cook County Hospital. The board will rule this week on Cook County's certificate of need for a new hospital.
The 13-member board is an independent body, but it uses the state health department's staff for research, guidance and recommendations. Because Cook County is willing to put up tax dollars to pay for the project, the board may rule in its favor.
The new hospital would replace the decrepit 82-year-old, 932-bed complex and its 13 buildings with a hospital that's less than half the size at 464 beds. A key to Cook County's replacement is increasing the number of ambulatory-care clinics from eight to between 20 and 25.
But the health department staff painted a shocking picture of costs when compared with other Illinois construction projects approved by the Health Facilities and Planning Board. Cook County Hospital has no available cash or securities to put toward the project, the report said.
Cook County's debt ratios are 10 times that of other hospitals with board approval. If the project were undertaken, Cook County Hospital's debt per adjusted bed would be $1,024,100 compared with a median of $96,685 for board-approved hospitals.
"In reviewing all Illinois hospitals' debt statistics, adjusted out to the year 2001, this applicant's statistics exceed all others," the executive staff's report said.
Other project costs are also higher than those of board-approved projects. For example, architectural fees total about $19.9 million or 5.7% of new construction contracts. The board's standard is 4.32%.
Chicago-area hospitals and healthcare providers have rallied behind a new Cook County hospital (July 4, p. 12).