The Cook County Health and Hospitals System is facing a $40 million budget deficit nearly halfway through its current fiscal year.
A lower number of patients being served by county health facilities and signed up for CountyCare, the county’s managed care health plan, are part of the problem. So is soaring overtime costs, according to financial experts within the Health System.
“Our overtime is outlandish,” said Doug Elwell, the Health System’s deputy chief executive officer of finance and strategy.
The county Health System went into this budget year expecting that a growth in full-time equivalency employees would cause a decline in actual overtime expenses. However, that has not been the case and overtime costs for the county are actually above budget projections.
Elwell said some of the surge in overtime is because of the need to staff certain vital equipment.
“Some equipment is required for all three shifts,” Elwell said. “We staff two shifts well and the third shift we do not staff so well. That’s a lot of the grounds for the OT.”
Despite the county Health System being $40 million in the hole, Elwell is not ready to wave the white flag just yet with seven months still to go in the county’s fiscal year.
“I still believe we can make budget here,” Elwell said, citing the knocking of $20 million off the Health System’s budget deficit through actions in the past two months. “Our goal today is we have to hit (department) budgets and we have to hit them for a variety of reasons. One of the dangers today is we’re in the midst of transformation that we have to make so we have to hit these budgets.
“The second we believe that we no longer can (make budget), we will report it immediately … It will be hard. There will be a whole lot of not sleeping, but I think we can do it still.”
Elwell said Health System officials are stopping short of revamping their overall budget at this point, feeling that additional steps will be able to make up the shortfall by year’s end.
One cost savings the county Health System is looking at is providing specialty prescriptions to patients by being licensed for specialty drugs for such conditions as hepatitis and HIV. By being a distributor of the specialty drugs, the county pharmacy can negotiate better prices for the drugs, according to Steven Glass, executive director of managed care for the county. It also can be a go-to source for non-county patients.
The amount of specialty prescription coming into the county has risen from 12.4 percent to 21 percent in the past year, an increase of $1 million in new revenue for the Health System.
The amount of area patients getting their HIV medication from the county now that the pharmacy has a specialty license for key prescriptions has nearly doubled, going from 37 percent to 70 percent. One-third of the new medications issued by county pharmacy to fight hepatitis have been to new patients to the pharmacy, Glass noted.
“We are trying to drive more and more business,” Glass said.
Glass, Elwell and Ekerete Akpan, county health’s chief financial officer, all talked with the Health System’s Board of Directors on June 30 about the agency’s financial plight for more than 40 minutes.
Board member Ric Estrada said with the huge hole the Health System finds itself in, such a deep dive into the agency’s finances was vital.
Akpan noted that part of the Health System’s financial issues come from being 5 percent off budget projections for revenue.
He said like other government entities, pension costs are taking a toll on the Health System’s finances. Akpan said the agency needs to make $8 million in pension payments to meet its obligations.
“It’s not good news,” Akpan said of the Health System’s finances.
Fewer people are getting care through the Health System right now, Akpan said, noting that 17,000 people use the county for their primary care. Budget projects expected 22,000 primary care users of the county system.
“We are off our target numbers,” Akpan said. “Spending is a concern.”