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Questions Remain Over Cause Of Roseland Hospital’s Financial Emergency

Roseland Community Hospital (Credit: CBS)

Roseland Community Hospital (Credit: CBS)

CBS Chicago (con't)

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CHICAGO (STMW) – Did Roseland Community Hospital wind up on the brink of closing last week because of the primarily poor population it serves? Or because of mismanaging their resources?

Depends on who you ask, the Chicago Sun-Times reports.

Roseland had said it was in danger of closing on Wednesday because it owed $7 million to pay off debt that was more than 90 days delinquent. But Gov. Quinn was able to give the safety-net hospital $350,000 to keep the doors of the financially strapped facility open.

Sharon Thurman, a hospital vice president, has said the money will allow the hospital to meet its June 17 payroll, giving Quinn’s number crunchers time to review the hospital’s budget and come up with a long-term plan.

Roseland Community Hospital, a 162-bed hospital that provides emergency services to approximately 28,000 people per year, has said it got here because it serves a primarily poor population that often doesn’t have any health coverage. The next closest hospital is almost 6 miles away.

The hospital could not be reached for this story.

The most recent financial statements available show that Roseland dropped to a $2.4 million operating loss for the fiscal year ending March 31, 2011 — from a $5.9 million loss in operating income the year before.

The largest portion of its population — more than 50 percent — has Medicaid, the state-federal health insurance program for the poor that tends to pay too low and too slow to providers.

And the hospital says it provided $25 million in uncompensated care in 2012.

But the state of Illinois says there’s more to the story at Roseland than just the population it serves.

The state noted that for the last three years, it has provided Roseland $28.5 million to $30 million each year for Medicaid claims, covering the costs of caring for uninsured patients, and other payments. The state could not immediately provide data about other similar safety-net hospitals to compare whether Roseland received more or less from the state.

Illinois says it also put the hospital on an “expedited schedule,” allowing it to receive reimbursement faster than other hospitals in the state.

Agreeing with the state of Illinois, state Sen. Emil Jones III (D-Chicago), whose district includes Roseland Community Hospital, said the “poor decisions” Roseland management has made are just as much a part of the situation as having $25 million in uncompensated care.

“Myself along with the governor’s office has stepped in numerous times in the past, and none of it has worked,” said Jones, who says he has been “fighting to keep Roseland open.”

The “poor decisions,” he said, included building the adolescent behavioral health unit with its operations money instead of waiting until it had eventually secured $7 million from the state — $4 million more than it had asked for.

Similarly, State Rep. Robert Rita (D- Blue Island) said that Roseland’s situation was “probably a combination of a few things,” such as heavy use of the emergency room — costlier than a traditional doctor’s office visit. But “the direction that they put this hospital in seems like it’s the biggest one,” he said.

Former president and CEO Dian Powell — who has since said she will step down after the hospital says she incorrectly stated that the state owed Roseland $6 million — has denied any mismanagement.

Rita, though, said the snafu in initially saying the state owed the hospital when it didn’t is a key example of mismanagement.

Roseland has already cut more than 100 employees, called for another 47 employees to take time off without pay and enacted pay cuts for five executives.

That and other changes are part of Roseland’s sustainability plan that it says will help it get stable and save $700,000 a month.

An independent “chief restructuring officer,” who has not been named, will develop a long-term financial plan for Roseland, in an attempt to keep it open, the state has said.

(Source: Sun-Times Media Wire © Chicago Sun-Times 2013. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)