Charity hospitals reach brink of closure

CHICAGO -- Two charity hospitals in Illinois are facing a life-or-death decision. There's not much left of either of them -- one in Chicago's south suburbs, the other in impoverished East St. Louis -- aside from emergency rooms crowded with patients seeking free care. Now they would like the state's permission to shut down.

The institutions, which have served low-income people in the state for more than 100 years, represent a significant development that's gone largely unnoticed as the nation climbs out of the recession. Many charity hospitals, already struggling with rising costs, are on the brink of failure because of looming budget cuts, increasing numbers of uninsured patients and a slow economic recovery.

"With economic downturns, you can finesse them for 12 months or 24 months," said Jim Tallon, president of the not-for-profit United Hospital Fund of New York, a research and philanthropic organization. "But now everybody's used up all their tricks. That's when people throw their hands up in the air and say we're not going to be able to continue operating."

Safety net hospitals have closed in Florida, Georgia, Pennsylvania and New York in recent years. Of the 15 hospitals that shut down in New York City last decade, five were safety net hospitals; another filed for bankruptcy.

The closings are a blow to low-income urban neighborhoods. Patients often must travel long distances to other hospitals, meaning lengthy waits in those emergency rooms and ambulances turned away when the crush grows extreme.

"I'm devastated," said Michael Yanul, a muscular dystrophy patient at the Cook County public hospital that's in danger of closing. "The doctors and nurses here have kept me alive. I can't breathe on my own."

Patients there face a four-hour bus ride to the next closest public hospital.

Charity hospitals are the descendants of almshouses opened more than a century ago. Cities, counties and religious institutions built hospitals with a mission to care for the poor..

Today, all hospitals provide some charity care. But about 800 of the nation's 5,000 hospitals do the lion's share, often in the heart of poor communities and serving a large proportion of patients who don't have insurance or are on Medicaid, the government health care program for the poor.

From the recession's start through mid-2009, the number of patients seeking free care at the hospitals increased 23 percent, according to the National Association of Public Hospitals and Health Systems. Patients who had insurance lost it when they lost their jobs, leaving the hospitals to absorb the costs.

Many states with budget problems cut back their financial help. Florida reduced its hospital reimbursement rate by 1.6 percent last year, then another 7 percent this year. Another 12 percent cut has been proposed. One Jacksonville charity hospital, expecting a loss of $60 million, said it would be at risk of shutting down.

No one knows exactly how many hospitals have closed, but experts say the number will be growing. The fate of the two Illinois hospitals will be considered Tuesday by the Illinois Health Facilities and Services Review Board. Without money to solve the operators' financial problems, the board may have little choice but to allow the hospitals to die.

If struggling hospitals can hold on a few more years, they could benefit from the national health care law. Starting in 2014, the Affordable Care Act will expand health insurance to more people.

However, "we're worried people will have health insurance but they'll have nowhere to go," said Dr. Bruce Siegel, CEO of the national public hospitals group.

Kenneth Hall Regional Hospital is the only hospital in East St. Louis, a city of 30,000, where unemployment is 15 percent, far above the national average. One-third of the city's families are below the poverty line.

The hospital has lost $5 million a year since 2000. The state has cited the hospital for safety violations that would require nearly $6 million to correct.

"The building is 85 years old, is no longer safe to operate as a hospital facility and the cost of doing so is prohibitive," the Southern Illinois Healthcare Foundation, the hospital's operator, said in a report to the state. In 2008, with losses mounting, the hospital shut down 130 hospital beds and stopped providing trauma care, sending victims of shootings and car accidents six miles across the Mississippi River to hospitals in Missouri.

Still, the number of uninsured patients for the foundation's two hospitals swelled by more than 300 percent during the recession. And the hospital had trouble getting timely reimbursement from Medicaid. Illinois, with severe budget problems, has been notoriously late in making Medicaid payments to hospitals and other providers, said East St. Louis Mayor Alvin Parks Jr.

Near Chicago, Oak Forest Hospital is one of three hospitals owned and run by Cook County, part of the safety net that takes all patients whether they can pay or not. The hospital helps poor patients sign up for Medicaid, but it can take six months to get them on the program. The number of uninsured patients more than doubled during the recession, with the hospital carrying the costs. "Somebody has to take the responsibility," Dr. Srinivas Jolepalem, a staff member who was laid off last year during budget cuts.

Emergency room visits increased from 29,000 in 2007 to nearly 33,000 in 2009.

The proposed closures in Illinois have drawn crowds of chanting protesters to meetings. In that, it is similar to other recent hospital closures elsewhere. In Pennsylvania, the closure and demolition of Braddock Hospital last year in the eastern suburbs of Pittsburgh sparked dozens of protests and at least two lawsuits.

"Very often there's a lot of panic," said Siegel of the National Association of Public Hospitals and Health Systems.

If Oak Forest closes, 42-year-old Gilbert Shepard, who suffers from congestive heart failure and shortness of breath, fears he'll have to travel 20 miles to another county hospital in Chicago where the emergency room is often crowded and waits are many hours long.

"I will have to ride a bus or get someone to drop me off and wait for hours before I'll be seen," Shepard said.