Chicago's storied public hospital system gets boost from its new Medicaid plan

CHICAGO—Until last year, Ray Robinson never had health insurance.

Robinson, 52, who grew up on Chicago's South Side, admits he used to sell and use heroin and participated in several burglaries, which landed him in prison. Having health coverage was not a priority, nor was it a real option.

Still, he had a lot of medical problems. He was stabbed in gang fights and injured in car accidents. He's had asthma attacks. Whenever he needed care, Robinson went to the emergency department at Cook County Health and Hospitals System, the city's public safety net system.

Then, last year, Robinson worked through his substance-abuse problems and signed up for CountyCare, the system's Medicaid managed-care plan, which launched in 2013. Since Robinson got his CountyCare card, he has gone regularly to a primary-care clinic to see his doctor. He had a few broken teeth that were extracted the same day he called for a dentist appointment. Most important to him, he has built a relationship with providers who help him stay healthy.

“CountyCare has changed my whole view on life in relation to health and other areas,” said Robinson, who now works part time and lives about a mile away from the hub of the Cook County system, John H. Stroger Jr. Hospital. “Diet is important, environment is important, the way I take care of myself is important.”

The health plan also has improved the health of its parent system. CountyCare and the state's Medicaid expansion to low-income adults drove the system's financial gains last year, said Cook County Health CEO Dr. Jay Shannon. “That has been a breath of life and really has been a driver of cultural transformation within our health system,” he said. It has enabled Cook County Health to move forward with a $100 million capital spending plan that will replace antiquated facilities such as Fantus Clinic, an outpatient center near the main hospital that Shannon acknowledges has the feel of a 1970s-era Greyhound bus station.

CountyCare, which receives a monthly lump sum from the state for every covered member, brought in revenue of more than $650 million in 2014. Cook County Health was able to decrease its uncompensated care from more than $500 million to about $340 million, Shannon said. His system ended the year with a $14.1 million surplus, counting tax revenue, a first for the system. That makes it an outlier among safety net hospitals, which often lose money.

So far, CountyCare has enrolled more than 183,000 members, making it one of the largest Medicaid plans in the Chicago area, where 15 plans compete. Last year, about 68% of Cook County Health's patients had health insurance, up from 46% in 2013, before Illinois' Medicaid expansion under the Affordable Care Act. Most of Cook County Health's insured patients are on Medicaid, which pays relatively low rates. But that's better than no payment at all.

As more Americans gain Medicaid coverage, investing in a health plan is a potential lifeline for urban safety net systems. Having a health plan helps them better coordinate care. But safety net systems like Cook County still have to figure out how to compete effectively with other, often better-resourced insurers, and how to retain their newly insured patients, who for the first time, have other care options. On top of that, Cook County and other systems still have to overcome funding shortfalls, tough political budget battles, and socio-economic and racial inequities.

“Safety net providers that own health plans may be the best positioned to shift their focus to population health,” said

Dr. Katherine Neuhausen, an assistant professor at Virginia Commonwealth University. However, she said, those systems must have large financial reserves, and “recruit enough members to support investments in innovative case management and care-coordination programs and health information technology.”

Cook County Health, known simply as County to most Chicagoans, has been a fixture in the city since before the Civil War. Stroger Hospital was built 13 years ago, after a long political fight to replace the old Cook County Hospital, a giant, ornate Beaux Arts building that opened in 1914, and now stands vacant behind the new hospital.

County has long meant life or death for hundreds of thousands of lower-income Chicagoans, and it has had to survive on a shoestring budget. Now the system is a victim of Illinois' months long budget standoff between Republican Gov. Bruce Rauner and Democratic legislative leaders. In July, a federal judge ordered the Rauner administration to keep paying Medicaid providers in Cook County despite the impasse.

Given these challenging conditions through the years, County “was the most wonderful and most difficult place to work,” said Dr. Peter Orris, a former County occupational-medicine physician who's now at the University of Illinois at Chicago. It has required idealistic providers to think of new ways to reach out and help their patients.

The system's doctor-patient bonds have always been strong. Dr. Gordon Schiff, a County physician who led clinical-quality initiatives and now oversees patient-safety research at Brigham and Women's Hospital in Boston, remembers tussling with a health insurer for two hours to pay for a patient's prescription. He ultimately gave the patient $30 to fill the order—a move that got him reprimanded for “unprofessional” behavior but brought him national support.

Dr. David Ansell, an internal medicine physician who worked at County for 17 years and is now at nearby Rush University Medical Center, recalls seeing an older black female patient whose blood pressure was sky high. Ansell asked her if she was feeling stressed. Tears welled up in her eyes before she told him her two grandchildren were recently shot and killed on her front porch. It was a brutal reminder that social and environmental conditions have a direct impact on individuals' health.

“Witnessing this degree of suffering is not that easy to do,” said Ansell, who wrote a book about his experiences at County.

Economic disparities and racial discrimination came to the fore at Cook County Health during the wave of patient dumping that occurred in the 1980s. Many of Chicago's private hospitals redirected their uninsured patients to County. As many as 700 patients a month were sent to County because “they failed their wallet biopsy,” Schiff said.

That discrimination hit hard in Chicago's black community, whose members have viewed County as the safest and most reliable place for healthcare. “If you were a black patient in Chicago, you came to County even if you had the resources to go elsewhere,” Orris said.

Last year, Shannon was named CEO of Cook County Health and has been part of the system for a large chunk of his career. He worked as a general internist at the old hospital and later was a clinical educator. “I originally landed with the very green notion that, in my specialty, I was going to fix the world's problems,” he said. But after witnessing “the sea of humanity” County treated on a daily basis, he realized he couldn't do it alone.

After a stint at Parkland Memorial Hospital in Dallas, Shannon returned to County in 2012. His predecessor as CEO, Dr. Ram Raju, helped secure the federal Medicaid waiver that created CountyCare. With Illinois expanding Medicaid under the ACA to adults with incomes up to 138% of the federal poverty level, County saw an opportunity to become a provider of choice rather than the provider of last resort, as well as the chance to reduce its burden of uncompensated care.

CountyCare allows members to receive care out of network and pays outside providers going Medicaid rates. But it encourages members to stay in-network, which is not an easy task, even though the plan has one of the broadest networks among local Medicaid plans. That network includes all of County's facilities and more than 40 area hospitals. Many believe County has to overcome its old image as a tattered provider of care to the poor to compete successfully with other hospitals.

For fiscal 2016, Shannon has made it a top goal to keep more members in-network. He projects County will collect $310 million in revenue from CountyCare members who go to the system's doctors, hospitals and clinics. To keep patients healthier and reduce costs, CountyCare officials have started to more closely monitor high-risk members and require patients to fill prescriptions for 90 days instead of 30.

Another part of the solution will be expanding relationships with Chicago's independent charity-care clinics and signing up the thousands of Cook County residents who are eligible for Medicaid but haven't yet enrolled. Judith Haasis, executive director of CommunityHealth, a philanthropic organization that runs two free local medical clinics, said she works with Shannon regularly.

Shannon also wants to make sure CountyCare members don't lose coverage during their annual redetermination period, which can be confusing for people unfamiliar with insurance. “You're talking about people who may have had no modeling of what it's like to have insurance for two or three generations,” Shannon said. “You've got to develop these capacities and skills.”

Retaining old members and attracting new ones means County will have to improve patient satisfaction and connect more regularly with local residents. It's already trying to do that through new Saturday hours at community clinics, an expanded patient call center, better parking and customer-service training for staff.

But some observers say it won't be easy for County to keep patients in-house and compete with major insurers such as Blue Cross and Blue Shield of Illinois. “CountyCare is a great accomplishment, but it will feel like pushing a rock uphill for a long time,” said Jonathan Dopkeen, a health policy professor at the University of Illinois at Chicago.

Like other safety net systems, County faces additional threats, including the ACA's readmissions and value-based purchasing programs for Medicare. Social determinants outside of the hospital's control, such as inadequate housing and food, often push low-income seniors back to the inpatient setting. And the loss of federal disproportionate-share hospital payments could be a larger problem, said Jason Hockenberry, a health policy professor at Emory University. County estimates DSH payments will represent 11% of its revenue in 2016, down from 12% for 2015.

There also are demographic issues. Rapid gentrification in the West Loop neighborhoods near Stroger Hospital is pushing County's lower-income patient population away from the system's nucleus, making investments in new ambulatory sites even more important. But Shannon believes his system has “a leg up” on the competition because it has a “cultural competence and an understanding of the communities we've served.”

Despite all the obstacles, supporters say CountyCare is a major advance in providing coverage and care to Chicago residents. Ray Robinson said one of his friends had lost most of her teeth because of drug addiction, and would always look at the ground when she spoke, embarrassed to show her mouth. But after she signed up for CountyCare, she was able to go to the dentist, who gave her a new smile. It was incredibly liberating for her.

“She said, 'CountyCare, baby,' ” Robinson said. “It gave her confidence.”