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Section 1A Page 36 LEGAL NOTICE COOK COUNTY, ILLINOIS FISCAL YEAR 1977 Week of March 8,1977 HEALTH AND HOSPITALS GOVERNING COMMISSION CHARLES A. DAVIS Chairman JOHN W.B. HADLEY Chairman, Committee on Finance JAMES G. HAUGHTON, M.D. Executive Director JACK A. McCLARY Associate Director for Budget and Finance Commissioners f Mrs. W. Miles Burns John W.B. Hadley Charles A. Davis Ellsworth E. Hasbrouck, M.D. George Hill Mrs. Sybille C. Fritzsche Charles A. Hayes Edward A, Tyler, M.D. l+l Health and Hospitals Governing Commission of Cook County 1900 West Polk Street Chicago, Illinois 60612 Telephone 312/633-7425 BUDGET MESSAGE January 3, 1977 Mr. George Dunne, President, and Members, Cook County Board of Commissioners County Building 118 North Clark Street Chicago, Illinois 60602 Dear President Dunne and Commissioners: fiscal Year 1976 has been the most difficult period in the short history of the Health and Hospitals Governing Commission (HHGC). The difficulties were produced by actions taken by the Illinois Department of Public Aid' (IDPA)--actions, some of which were declared illegal by the United States Department of Health, Education and Welfare and have resulted in a lawsuit against the State of Illinois by the Illinois Hospital Association, the HHGC, and some of the State's largest hospitals. Other actions by the State, while not necessarily illegal, have hod the effect of denying assistance to thousands of our patients and reimbursement to us. The backlog of delinquent responses to applications for Medicaid remains in excess of 6,000 cases. At the same time, the IDPA has used all kinds of administrative ruses to deny certification to our patients. The result is that, in one batch of 6,000 dispositions, 63% were rejected, two-thirds of them for administrative rather than income reasons. The cumulative effect of these actions has been to deny the Governing Commission over $10 million of anticipated revenues and, therefore, cause a budget deficit at year-end in spite of the Commission's efforts to avoid such an event by careful spending. The budget approved by the Cook County Board of Commissioners for Fiscal Year 1976 would have permitted the Commission expenditures of $163 million for all institutions and programs after deducting allowances for collection losses and tax note interest. Through careful management, we held our expenditures to $154 million because we were convinced that the revenue estimate imposed on us by the Cook County Board of Commissioners was unrealistic in view of the behavior of the IDPA during the latter part of fiscal Year 1975. Our worst fears have been realized. This deficiency of revenue required controls on our expenditures at Cook County Hospital which resulted in postponement of physical renovations necessary for improvements in patient care, cancellation of planned equipment replacements and inability to fill certain patient care personnel requirements. Additional constraints were necessary at Oak Forest and Cermak Memorial Hospitals, our community clinic program and all but three of the Commission's budget units. We are awaiting a decision from the federal court concerning our lawsuit against the State of Illinois. A favorable decision in that case, toaether with a more resoonsive state administration, could improve our fiscal position in Fiscal Year 1977. Our budget submission reflects this optimism. In spite of the optimism, the serious damage done to our fiscal support by the County Board in Fiscal Year 1975, and the inadequate performance by the State in 1976, require us to seek a tax increase in 1977 because of the need to address priorities which must be faced if we are to maintain the accreditation of our institutions. During 1976, we assumed responsibility for the operation of two neighborhood health centers in the southern part of the County. In Robbins we assumed operation of a center started by St. Peter Clover Catholic Mission. The Board of the Center has been expanded to include the Mayor of the *fflÂ°ge or** other citizens. In East Oiicogo Heights, another center started by the community was transferred to our control. These centers ore ImVed to OaV Forest Hospital for hospital bock-op services. Our support of health activities by the Christian Action Ministry on the West Side of Chicago continues and is being reviewed in the light of health activities by other agencies. On Ae southwest side of the city we have begun work with the community organization in the LeQcrire Court housing development. We need capital development funds to create an appropriate physical facility and these we being sought through foundations and the federal government. We appreciate the derision made fay the Cook County Board of Commissioners in 1976 to provide funding for Ihe renovation end utilities rehabilitation of Oak Forest Hospital." Dewgn work with the County's architectural consultants continues on schedule and construction will begin in 1977. On the legislative side, the Governing Commission has instructed rts staff to develop a legislative program to achieve appropriate changes in the Medicaid law at both the federal and state levels. When these legislative proposal* are drafted, they wfll be shared wmS the County Board, and we hope that you will join v$ in supporting these amendments H i you consider them appropriate. One important change we will seek is appropriate fond- Â· ing far ambulatory services' Both Medicare and Medicaid ! emphasize funding for inpatient hospital care and provide little support for ambulatory and preventive services. This deficiency acts not only as a disincentive to other hospitals to develop and provide ambulatory services, but also makes it very expensive and difficult for the Governing Commission to .develop its outreach programs. A change in this funding approach has the potential for major savings in inpatient hospital costs since many inpatients we see at Cook County Hospital need hospitalization because they did not have ready access to ambulatory care early in their illness. As you begin to review our budget request for 1977, it is imperative that you keep certain important points in mind: 1. Although the HHGC's budget has increased 52% in six years (from $112 million in 1971 to $170 million in 1976), the County's support has increased by only 2% (from $46 million in 1971 to $47 million in 1976). Chart 1. ' 2. During the period of 1971-75, we recovered $26 million of previously uncollacted revenues for services rendered prior to 1971 and used these funds to finance the restoration of our institutions. Not only has that reservoir of supplementary revenues dried up, but our actual patient revenues for 1975 and 1976 total $22 million less than the budgeted estimates, due most to the problems mentioned earlier. (See Table #1) 3. The 20.05 mills tax levy which supported the HHGC's deficit in 1976 is 8% lest than the 21.9 mills which supported our activities in 1971. Chart 1. 4. The 52% increase in the budget of the HHGC from 1971-76 is 44% less than the 92% increase in costs which has occurred in Chicago area hospitals during the same period. Chart 2. 5. The County's tax support to the budget of the HHGC represented 41.2% of the total budget in Fiscal Year 1971 and only 27.7% in 1976. Chart 3. We hope that you will help us serve the people of Cook County by providing us with adequate support in 1977. We will do our part by pursuing every possible resource available to us and by our continuing efforts to improve and re- ine the quality of our management and the productivity of our efforts. Very truly yours. James G. Haughton, M.D. Executive Director Charte A. Davis Cnoirroan JGH/lbj inflation Oflwneo COWABISOH or Â«goct1St VS. ACTUAL PATH"! KlVtWlS TABLE 1-A I M TrtOUSAMPS Of DOtlAKS . I J i I 5 6 S Â«UE BUDGET ACTUAL UNUSUAL TftuC ESTIMATING APPMVtO COWT. WT. MOSS lltVENUtS [STinATIHC [RROn-tOL. I ADOPTED CASH RECEIPTS DIFFtHENCt NOTE A* ERKOH ? * COL. I LEGAL NOTICE i^l --~*^".~*- ^ri ' --**Â«Â» * TMÂ» ycarS revenue* from thli yeir'i services A/H-Thtt (e.r'i wllecllonÂ»(B)Â» TOTAL Lets Rerundt(c)Â» NET 1972 TMj ycÂ«r'i revenue* from t h l * year'* lervlcc* A/B-Thl, ye.r'j ctMÂ«tloÂ«i(Â»)Â« TOTAL Less Mf u nd,(c). NET ltl.812 111,751. 1971 TOTAL Less Munds(C)* Â«T TOTAL Less RefondstC)t NET SÂ»,282 57lt sTTotr *5.BS9 28,500 757359" 81,700 - 729 TO5J 69.735 3V08B - 666 557755 Bi.tjO 79, 112 79,1.12 85,129 609 81.520 1975 TOTAL Less Refunds(C)ft Â«" 98.181 85.669 - 111 537TBT 55755? i.U2 6.205 (5.06)1 (9.0; 6,612 5.1*1 1.171 13,685 10.717 2.938 5.108 3.532 1,576 (8,626) 333 (8.965) (9.1) 1276 T h i s year's revenue* from this y e a r ' s services 65.75* A/R-Thls year's collectlons(B) TOTAL(DJ* 57. ^12 1237T5S" 109,763 (U.MJ3) U3.MJ3) HO. 9) 1976....WITHOUT THE COOK COUHTT JOARO'S INCREASE OF SM HjlLIQHJN BUDGETED REVENUES 118.666 103.763 (8.903) - 18.903) (7.5) SEE FOLLOWING NOTES f -wy vr wr$ Â«% A - Revenues frotn previously u n b i l l e d patient accounts for services rendered during the years of .966 through 1970. These wtre not budgeted because their value was not known. B - In 1971, 1972 and 1976, revenues fron prior years' services to be collected m the current year were treated as balance sheet assets, and were not shewn as Revenues from Patient Fees on the revenue statement. I n 1973, I9?V and 1975 revenues fron prior years services to be collected rn the current year were included as Revenues fron Patlen^ Fees. The aforenentiontd assets are added to the revenues in this schedule to nake realistic conpansons. C - These are refunds to Third Party and Private Payers that appear in the Corptroller's reports, but not the budgets- The budget figures are net of this ite-i. D - The amount shown in the .576 ACTUAL colur.n is not Report f i g u r e . Conptrol ler's Percent Increase cmur i of Annual Expenditures over 1971 Chicago Area t2 * Hospitals 1971 1972 1973 197.1 1975 1976 Hi ZZZZySZtZT Funding Sources CHART 3 SOU-CM AapOvrtS aaootpd 6009*1 s i Â« I noÂ«jwxÂ»i immnmiiiimiiimiimmmiminmmnmitiiinm; 39.8 ' 27. Third Party Revenues Ccxjk County Tan Sjpoort Percent ol Total Revenues 1971 1972 1973 JÂ«k 1975 1976 EXHIBIT A RESOLUTION AND ANNUAL APPROPRIATION BILL FOR THE FISCAL YEAR 1977 BE IT RESOLVED, BY THE BOARD OF COMMISSIONERS OF COOK COUNTY ~ 1. THAT THIS RESOLUTION BE AND THE SAME IS HEREBY TERMED THE 'ANNUAL APPROPRIATION BJLL 1 OF THE HEALTH AND HOSPITALS GOVERNING COMMISSION FOR THE CURRENT FISCAL YEAR COMMENCING ON THE FIRST MONDAY OF DECEMBER, A.D. 1976. 2. THAT THE AMOUNTS HEREIN SET FORTH BE AND THE SAME ARE HEREBY APPROPRIATED FOR THE SEVERAL OBJECTS AND PURPOSES SPECIFIED HEREIN, FOR THE CURRENT FISCAL YEAR, COMMENCING ON THE FIRST MONDAY OF DECEMBER, A.D. 1976. 3. THAT FOR THE PURPOSE OF ADMINISTRATIVE DETAIL AND ACCOUNTING CONTROL, THE APPROPRIATIONS HEREIN SPECIFIED ARE MADE IN ACCORDANCE WITH THE STANDARD CLASSIFICATION OF ACCOUNTS, AS ADOPTED BY,THE BOARD OF COMMISSIONERS ON MARCH 6, 1Â°M AND AS AMENDED ON DECEMBER 27, 1963. , 4. THAT THE SALARIES OR RATES OF COMPENSATION OF ALL OFFICERS AND EMPLOYEES OF THE HEALTH AND HOSPITALS GOVERNING COMMISSION, WHEN NOT OTHERWISE PROVIDED BY LAW, SHALL BE GOVERNED AND SUBJECT TO THE SUPERVISION AND CONTROL OF THE COMMISSION AS AGENT OF THE COUNTY. - 5. THAT WHATEVER APPROPRIATIONS FOR SALARIES OR WAGES OF ANY OFFICE OR PLACE OF EMPLOYMENT ARE SUPPORTED BY A DETAILED SCHEDULE, ALL EXPENDITURES AGAINST SUCH APPROPRIATIONS, SHALL BE MADE IN ACCORDANCE WITH SUCH SCHEDULE. 6. THAT AMOUNTS APPROPRIATED UNDER CLASSIFICATIONS OTHER THAN SALARIES AND WAGES TO ANY DEPARTMENT, OFFICE, INSTITUTION OR BUREAU OF THE HEALTH AND HOSPITALS GOVERNING COMMISSION SHALL BE FIXED UNDER THE FOLLOWING CONDITIONS -- (A) INSOFAR AS PRACTICABLE ALL CONTRACTS AND OPEN MARKET REQUISITIONS 'FOR PURCHASES TO BE CHARGED AGAINST SUCH APPROPRIATIONS SHALL BE BASED UPON SPECIFICATIONS WHICH ARE DEFINITE AND CERTAIN AS TO CHARACTER AND QUALITY, AND WHICH CONFORM TO STANDARD SPECIFICATIONS FOR THE VARIOUS CLASSES OF SUPPLIES, MATERIALS, PARTS, OR EQUIPMENT ALREADY PROVIDED OR HEREAFTER TO BE PROVIDED BY THE HEALTH AND HOSPITALS GOVERNING COMMISSION. ' / (B) ALL OPEN MARKET REQUISITIONS AND CONTRACTS ISSUED BY ANY DEPARTMENT, OFFICE, INSTITUTION OR BUREAU FOR SUPPLIES, MATERIALS, PARTS OR EQUIPMENT, FOR WHICH SPECIFICATIONS HAVE BEEN PRESCRIBED, SHALL CONTAIN A DESCRIPTION OF GOODS ORDERED CONFORMING WITH SUCH STANDARD SPECIFICATIONS. (C) THE HEALTH AND HOSPITALS GOVERNING COMMISSION'S DEPARTMENT OF PURCHASES SHALL, IN AUDITING CLAIMS FOR GOODS DELIVERED ON OPEN MARKET ORDER, DETERMINE THROUGH INSPECTION OR OTHERWISE WHETHER THE GOODS DELIVERED CONFORM TO SUCH STANDARD SPECIFICATIONS. (D) BEFORE ADVERTISING FOR PROPOSALS FOR WORK TO BE PERFORMED UNDER CONTRACT, WHERE THE COST THEREOF IS ESTIMATED TO BE FIVE THOUSAND DOLLARS ($5,000.00) OR MORE, THE PROPOSED CONTRACT AND SPECIFICATIONS SHALL BE SUBMITTED FOR APPROVAL TO THE HEALTH AND HOSPITALS GOVERNING COMMISSION. 7. THAT THE HEADS OF DEPARTMENTS, OFFICES, INSTITUTIONS OR BUREAUS OF THE HEALTH AND HOSPITALS GOVERNING COMMISSION, ARE HEREBY PROHIBITED FROM INCURRING ANY LIABILITY AGAINST ANY ACCOUNT IN EXCESS OF THE AMOUNT HEREIN AUTHORIZED FOR SUCH ACCOUNT. 8. THAT THE ESTIMATES OF CURRENT ASSETS AND THE REVENUES OF THE FISCAL YEAR 1977 AVAILABLE FOR APPROPRIATION, AND THE AMOUNTS APPROPRIATED AND THE OBJECTS OR PURPOSES THEREOF, ARE AS SPECIFIED IN THE FOLLOWING ~ COOK COUHTY, ILLINOIS HEALTH A!1D HOSPITALS GOVERNING COHMISSIOU OF COOK COUNTY FUND ESTIMATED BALANCE SHEET AT THE BEGINNING OF FISCAL YEAR 1977 ASSETS CASH AND INVESTMENTS. AT COST $( 5,633,013) IMPREST CASH FUNDS 5,600,869 UNCOLLECTED PROPERTY TAXES: PRIOR YEARS". S 2,183,361 1976 UVY li7,02Ji,Â«0 USS-AUOW. FOR IOSS OF TAX COLLECTION ( it,702,*63t) ACCOUNTS RECEIVABLE FOR PATIENT CARE SERVICES RENDERED W PRIOR TEARS ASSETS OF SPECIAL FUNDS, WET INVENTORIES Mt,505,537 61 ,367,000 3,359,887 2,593, TOTAL ASSETS ......................................................... S109, 793 , RESERVES ATiD fUHD BALWjfCE ACC0UNTS PAYABLE AND ENCUMBRANCES. 1976 TAX ANTICHAT:ON NOTES AND INTEREST PAYABLE MOTES PAYABLE FP.OH COLLECTIONS OF J976 TAX LEVY $3*1,000,000 ANTICIPATED JTJTETtEST ON Â«OTES 1,819,3?* ACCRUED SALARIES PAYABLE RESERVE FOR WESTMEHT IN INVENTORY RESERVE FOR IMPREST CASH SPECIAL FOND BALANCE FUND BALANCE 35,839,311) 2,593,190(1) 5,600,869 3,359,887 ..52,372 J 2S TOTAL LIABILITIES, RESERVES AND FUND BALANCE S109,793,,Â»t70 EXHIBIT B AVAILABLE FOR APPROPRIATION 5(5,633,013) -0- Vi ,505,537 61,367,000 $100,239,5?* 7,990,1(7* 35,819,31* *, 057,482 _52,372,2S*t Â£100,239,52* (1) THE PRELIMINARY INVENTORY FJ6URES AND RESERVE FOR INVENTORY AS OF DECEMBER 1, 1976 ARE SUBJECT TO ADJUSTMENTS VHICH SHOUID SOT BE MATERIAL AND WHICH DO NOT AFFECT APPROPRIATION FIGURES.