The Real Impact of the MacNeal Hospital Sale to Loyola Medicine

Impact on Property Tax Revenue

  • MacNeal Hospital is by far the #1 property tax payer in Berwyn.[i]
  • Berwyn stands lose an estimated $3.5 million in annual property tax revenue due to the Loyola/MacNeal deal.[ii] It will significantly impact local schools.

Charity Care spending

  • Loyola Medicine spent a meager 0.75% of net patient service revenue on charity care in 2017.[iii]
  • Loyola’s charity care spending as a percentage of revenue is lower than regional and national averages.
    • Cook County – 2.9%[iv]; Illinois – 2.1%[v]; Top 20 U.S. Health Systems – 1.4%[vi]

Loyola pays workers poorly and does not provide affordable benefits

  • Loyola pays front-line service hospital workers as low as $12 per hour.
  • CNA/Orderly/Attendant Average Hourly Wage from CMS FY 2018 Wage Index:[vii]
Medicare ID Hospital Name Average Hourly Wage
140150 University of Illinois Medical Center  $    20.52
140281 Northwestern Memorial Hospital  $    20.40
140124 John H. Stroger, Jr. Hospital of Cook County  $    18.06
140119 Rush University Medical Center  $    17.70
140088 The University of Chicago Medical Center  $    16.53
140276 Loyola University Medical Center  $    15.66

Loyola/Trinity pays executives lavish salaries.

  • Trinity Health Illinois CEO Larry Goldberg received $1.3 million in total compensation in FY 2016.[viii]
    • $625/hour.
    • 40 times greater than average CNA pay @ Loyola University Medical Center.[ix]
  • Loyola/Trinity is paying a substantial price for MacNeal.
    • Loyola Medicine is paying $270 million to acquire MacNeal.[x]
    • Trinity only paid $100 million for the Loyola system in 2011.[xi]
    • If Loyola/Trinity has the resources to meet Tenet Health’s asking price for MacNeal, it can certainly afford to both provide workers with better pay and benefits and provide Berwyn an annual payment in lieu of lost property tax revenue.

The Illinois Hospital Association controls hospital policy in Illinois

The IHA aggressively pursues a legislative and policy agenda in Springfield that favors big health systems over community hospitals, workers, and patients.

  • Public Act 99-154: Health Facilities and Services Review Board Rule Changes (2016)
    • Expands projects eligible for an exemption from full HFSRB review to “include those to discontinue a category of service or to close a health care facility”.[xii]
      • A hospital or health system can now eliminate services or close altogether without the state board considering the impact on patients and communities.

Hospital Assessment Bill (Pending)

  • The IHA drafted the new hospital provider assessment model that distributes $3.5 billion in state and federal Medicaid funds.
  • The IHA-drafted model would close Roseland Community Hospital and South Shore Hospital. Both threatened facilities are on Chicago’s south side and care for medically underserved communities of color.

Big health systems dominate and control the IHA and determine its policy agenda

  • Major health systems are comfortable with significant consolidation and closure of safety-net facilities.
    • Trinity Health Illinois President & CEO Larry Goldberg told the Illinois Hispanic Chamber of Commerce that he expects there to be only three to five health systems operating in Chicagoland in the near future.[xiii]

Demand:  Community Benefit Agreement

Community Benefit Agreement should include:

  • Annual payment in lieu of taxes equal to lost property tax revenue.
  • $15 minimum wage and right to organize free from interference
  • Local hiring
  • Community Benefit Advisory Board

[i] City of Berwyn, Illinois, Comprehensive Annual Financial Report for the Year Ended December 31, 2016, p. 152, http://www.berwyn-il.gov/sites/all/files/pdfs/Finance/2016_City_of_Berwyn_CAFR.pdf

[ii] Office of the Cook County Clerk, 2016 Tax amounts for 77 parcels that comprise the MacNeal Hospital Campus.

[iii] E-001-18-MacNeal Hospital, Berwyn, Exemption Application, Illinois Health Facilities & Services Review Board, January 10, 2018, p. 91 https://www2.illinois.gov/sites/hfsrb/Projects/ProjectDocuments/Exempt/E-001-18/2018-01-10%20E-001-18%20Application.pdf

[iv] Illinois Department of Public Health, Annual Hospital Questionnaire – Calendar Year 2016, https://www2.illinois.gov/sites/hfsrb/InventoriesData/FacilityProfiles/Pages/default.aspx

[v] Illinois Department of Public Health, Annual Hospital Questionnaire – Calendar Year 2016, https://www2.illinois.gov/sites/hfsrb/InventoriesData/FacilityProfiles/Pages/default.aspx

[vi] Bannow, Tara, “Charity care spending flat among top hospitals”, Modern Healthcare, January 6, 2018, http://www.modernhealthcare.com/article/20180106/NEWS/180109941

[vii] Centers for Medicare and Medicaid Services, Fiscal Year 2018 Final S3 Occupational Mix Public Use File, CNAs, Orderlies, and Attendants – Hourly Wage, available @ https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Files-Items/FY2018-Wage-Index-Home-Page.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending

[viii] Loyola University Medical Center, IRS Form 990, FY 2016, p. 69, viewed via Guidestar @ http://www.guidestar.org/FinDocuments/2016/364/015/2016-364015560-0e397d53-9.pdf

[ix] Calculated using Centers for Medicare and Medicaid Services, Fiscal Year 2018 S3 Occupational Mix Public Use File, CNAs, Orderlies, and Attendants – Hourly Wage, https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/AcuteInpatientPPS/Wage-Index-Files-Items/FY2018-Wage-Index-Home-Page.html?DLPage=1&DLEntries=10&DLSort=1&DLSortDir=descending

[x] Schorsch, Kristen, “Loyola to pony up $270 million for suburban Chicago hospital”, January 26, 2018, http://www.modernhealthcare.com/article/20180126/NEWS/180129915

[xi] Vesely, Rebecca, “Trinity Health completes Loyola acquisition”, Modern Healthcare, July 1, 2011, http://www.modernhealthcare.com/article/20110701/NEWS/307019963?template=print

[xii] Illinois Register, Rules for Government Agencies, Volume 40, Issue 44, October 28, 2016, p. 14650, http://www.cyberdriveillinois.com/departments/index/register/volume40/register_volume40_issue44.pdf

[xiii] Goldberg, Larry, “Managing through Health Care in Uncertain Times”, Presentation to Illinois Hispanic Chamber of Commerce, January 25, 2018.

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