It’s a two-part program this week.
First, a conversation with writer and journalist Robert Reed about Chicago’s political, cultural and economic outlook for the next few years, including this City’s upcoming mayoral election.
An in our second segment, WBEZ’s Kristen Schorsch explains the looming financial crisis at the Cook County Health and Hospitals system, where almost a half-billion dollars’ worth of care may go “un-compensated” this year.
Robert Reed, who’s written and edited for the Tribune, Crain’s and the Better Government Association – and worked for Pat Quinn as he transitioned from Deputy Governor to Governor – has heard those quiet rumors that Rahm Emanuel may not seek re-election. Reed says he wouldn’t have bought it back in January, but today “I’m buying it a little bit.”
“The more I’ve been out in the community I’m sort of amazed at the anger there is for Rahm Emanuel in so many different quarters,” he explains. “And when I hear it from small business people it’s fees. It’s – I’m getting all these fees and they are giving these tax breaks to the big companies and I’m picking up the tab for them, or at least that’s what they think. Obviously the situation with the police force and what’s going on in the west and south sides of the city have been hugely important, so I thought he was going in kind of really strong. I’ve been a little surprised at these areas where the anger just seems to be out now.”
We talk briefly about what a race without Emanuel might feel like, and the ways in which the race would be drastically different.
“I mean all the people running against him are saying, “I’m not Rahm Emanuel,” Reed begins. “Well if Rahm Emanuel is out of the mix then who are you and what have you done? Do we have a record that we can look at and judge you upon that record? McCarthy I think is going to have to run against his record no matter what. Vallas’ record is frankly kind of ancient. We don’t really know Paul Vallas anymore. Lori Lightfoot is an attorney and an activist and has had some municipal experience, but again nowhere near running an entire city. So… it would put everybody on a completely different level to sort of explain what it is that they hope to do and how to do it.”
But keep in mind, this is a micro-rumor spiked by the front cover of today’s Sun-Times, and it’s likely that after a few days we won’t be talking about it any more.
But we may be talking for a long time about the Pension Obligation Bonds the Mayor’s proposing, Reed’s skeptical, but not necessarily opposed to the idea.
“Well it won’t hurt,” he begins, “because the pension ramp is getting bigger and bigger and the city is going to have to come up with a lot of money and it’s just this huge drain on the city finances. The Pension Obligation Bonds are intriguing. They are usually floated by municipalities that are in really bad financial shape and it’s sort of a desperation move. In this case they seem to be saying we can structure the bonds in such a way that we can ease the pressure on our cashflow and cover our expenses and so on, and maybe even make some money down the road. But again, if that money is squandered or used for things other than the pensions like it was when the state did something similar to this under Blagojevich, then I think it’s just going to redouble your problems, so it really is going to come down to the details. I would like to see a lot more sunshine on the process before anyone signs off on it. Unfortunately it looks like it’s going to just kind of zip through. If that happens we can end up paying a lot more down the road and that would be bad.”
Reed, not surprisingly, isn’t standing in line to buy a ticket for the bullet train to O’Hare. “Could this deal announcement come at a worst time?” he asks. “Because right after the city reveals it then you find out that Elon Musk is kind of going through some problems”
Musk, as we know, has rattled his investors with talk of privatizing the company, and of his own exhaustion.
“I’m sure somebody has a succession plan in a drawer in case he can’t see it through,” Reed scoffs. “So we will see if this ever really comes to reality…What those investors want are those electric cars being manufactured in a way that they don’t blow-up and are safe on the road, and that’s where their focus is. I don’t think that these other ancillary issues that he wants to get into whether they are mini submarines or doing things like this are going to be top of mind with the investors”
We talk about Reed’s recent Chicago Magazine article The Battle for the Soul of Six Corners, about the struggles to define what Six Corners should become. Should it be the next Logan Square, just a few stops up the Blue Line? Or should it remain more like it is – a quiet enclave of middle class workers in their tidy bungalows? The battle is on.
And we reserve a few minutes to talk Tronc. The company that owns Chicago’s Tribune is probably in play, and a likely buyer is the very group, led by Patrick Soon-Shiong that bought the LA Tribune from Tronc a few months ago. Now they may want to buy the rest, including the Trib. “Tronc is definitely in play,” Reed asserts. “It will be bought. It’s going to be bought by private equity, probably with some kind of big investor like him involved. Where it goes from there is anybody’s guess. Do they want to keep it? In total it’s ten newspapers. My guess is that they will spin-off a number of these papers, maybe keep the Tribune as part of whatever they call it after Tronc but maybe not. So my understanding is that there is a computer system or something that he has helped design that he would like to integrate into the newspaper world and beyond and maybe this would help him to do that. So that’s just another part of the agenda that we have to learn more about. But right now if I were a betting man I would say private equity will buy Tronc and then they will split it up in some way.”
(BEGINNING AT 37:00)
Kristen Schorsch, who recently joined WBEZ is out with an alarming report about the rise of “uncompensated care” at the Cook County Health and Hospitals system, which consists of Stroger and Provident Hospitals.
In the last two years, the amount of service the hospitals provide for which the hospitals do not get reimbursed has doubled – from about a quarter of a billion dollars annually to more than a half billion.
Why? “Think about it in two different buckets,” she explains. “One is all the uninsured people that they treat and can’t afford to pay their bills, and then the other is this pile of bills that keeps rising from people who have private insurance and can’t afford it so they just don’t pay their bills. Also a bunch of claims that private insurance companies are denying. So there’s kind of like this mix of things that are happening.”
Obamacare (the ACA) has had dramatic effect in Cook County, providing hundreds of thousands of people with health insurance for the first time. But it doesn’t necessarily mean they can pay their premiums or their deductibles. And, Schorsch tells us, there’s another, completely different problem facing County.
“Governor Rauner largely privatized Medicaid, which is the government health insurance program for people who are low-income or disabled. And so what’s happened is the county health system used to mainly have two types of patients – people who were uninsured and Medicaid, so they would really only bill the state. We’re going to take care of someone, send the bill to the state and get paid.”
But now that’s all changed, because, in addition to all the other problems, Obamacare expanded the number of people who qualified for Medicaid, the program the governor “largely privatized.”
“Now you have all these private insurance companies,” she explains, “now they all cover Medicaid patients in the State of Illinois, and the county has its own Medicaid health plan called County Care. So it basically got a lot more complicated and the health system has to bill a lot more players. So that’s all these insurance companies you have to go after when they deny your claim, so essentially that’s what’s contributing to that pile of bills that they are not getting paid for as well because they just can’t get paid.”
It’s not unlike what every family faces after an urgent medical issue, with weeks of wrangling over denied claims and underpaid services, except that the County health system’s fighting over work they did for thousands and thousands of people.
“And hospitals across the country have struggled with this,” Schorsch continues. “And think about all these other hospitals having a lot more experience, but they are used to billing a lot of private insurance companies – and the county health system is not. Like literally over the last few years they’ve had to build a whole billing system to deal with this, so they’ve been trying to adapt quickly.”
There’s a separate, but equally alarming trend that’s also affecting County. There are 66 other hospitals just in Cook County, and they, too, are supposed to offer a certain amount of charity care. But they seem to be “referring” a lot more of their non-paying patients to the County system. Schorsch says she talked to the head of the County health system. “And he was like, ‘I can’t prove which hospitals are sending me their uninsured patients, but I can tell you why I think there are just more and more uninsured people coming our way.’ So I looked at about five years’ worth of this data that hospitals have to report each year to the Department of Public Health for the state. And basically what it shows is that back in 2012 the county health system provided 40% of all the free care in the county. Fast-forward five years to 2016, which is the most recent available data, and now it’s close to 50%.”
So 66 hospitals, including some very big and wealthy ones, are providing the other 50%.
And here’s one more statistic: although Obamacare helped hundreds of thousands of people, there are still more than 400,000 people in our County who have no health insurance at all, including an unknown number of undocumented residents. And the Cook County Health and Hospitals System is their only option.
You can read and listen to Kristen’s WBEZ story here.
Watch this double episode by tapping the image above.
Listen to the audio of this program here.
Read a full transcript of this program here: CN transcript Aug 30 2018