Advocate Health Care, Chicago’s biggest hospital chain and second-biggest private employer of any kind, believes in sharing the wealth. The nonprofit, with five hospitals in the suburbs and three in the city, took in $2.8 billion last year, and officials say that each year from 1997 to 2004 it spent more than $4,000 per occupied bed to make up the losses sustained by the three city hospitals, Bethany, Illinois Masonic, and Trinity. “We could not do what we do in the city were it not for our suburban locations,” CEO James Skogsbergh told Crain’s last year. Spokesperson Michael Maggio put it more bluntly this spring: “Advocate takes money from better-performing hospitals and shifts it to others. I guess we’re socialists in a way.”
Whatever you call it, Advocate’s policy grows out of its Lutheran and Congregational traditions and is engraved in stone outside its Oak Brook headquarters: “To serve the health needs of individuals, families and communities through a wholistic philosophy rooted in our fundamental understanding of human beings as created in the image of God.”
Yet twice this past summer busloads of people from Chicago–representing the Service Employees International Union (SEIU), the Albany Park Neighborhood Council, Northwest Neighborhood Federation, Logan Square Neighborhood Association, Jobs With Justice, South Austin Coalition, Chicago Coalition for the Homeless, and other groups–marched outside Advocate’s headquarters. They claimed that the chain is shortchanging its less profitable hospitals–the three city ones plus South Suburban in Hazel Crest–by not providing enough charity care (an issue covered by Kari Lydersen in the July 9, 2004, Reader), not investing enough in capital improvements, and not providing enough community benefits, such as health education. According to SEIU, which has been leading the protests, patients at the less profitable hospitals get the care they need significantly less often than patients at Lutheran General (Park Ridge), Christ (Oak Lawn), Good Shepherd (Barrington), and Good Samaritan (Downers Grove).
Advocate denies all these charges, yet it won’t answer specific questions about how its hospitals compare. “Typically we don’t break figures out by hospital,” says Tony Mitchell, vice president for communications and government relations. “We don’t look at it as city versus suburb. Each hospital benefits from being part of the system, and each hospital serves the distinct needs of its community. Because we’re a system, we tend to report results as a system.” In an 18-page pamphlet issued earlier this year, “One Mission, One Voice, One System,” Advocate accused the union of using its political clout “to generate investigations, lawsuits and negative publicity around issues it invented” with the underlying motive of making it easier to organize at the hospitals.
The union claims that the forces of health care capitalism are pulling Advocate away from its religious and charitable roots. “Advocate isn’t losing money,” says Joseph Geevarghese, an attorney and director of the union’s Hospital Accountability Project. “They have the resources to do more than just keep the doors open. The incentives are all for hospitals to act like Wal-Mart and IBM.” For example, the chain has to borrow money for its big projects, and if it wants the best interest rates it needs to show healthy returns–the lenders aren’t asking themselves what Jesus would do.
Neither side’s ad hominem arguments tell us whether Advocate is being fair in how it distributes its funds. The union could be acting in bad faith and still be telling the truth. Advocate could be keeping its moral compass even as it swims with the sharks. It’s hard to know which is the case because Advocate refuses to release more than a few numbers, even though additional ones might vindicate the chain. The information that is available is fragmentary and inconclusive, but it does suggest that the union is right to be asking questions.
The Illinois Health Facilities Planning Board has responded to community protests and asked Advocate to explain its plans for city hospitals, and a report is expected at the next board meeting, on January 23.
In December 2004 the SEIU’s Hospital Accountability Project published a blistering 24-page report, “Separate and Unequal: Racial Redlining in Investment at Advocate Hospitals,” based on records kept by the planning board. No hospital in Illinois can undertake major improvements until the board issues a “certificate of need.” Since 2000 major improvements have been defined as those costing $6 million or more, so a new cardiac-care center needs a certificate and a new CAT scanner doesn’t. As a result, major improvements are public knowledge, lesser ones are not.
Going through all the certificates issued to Advocate hospitals between 1995 and 2003, union researchers found that Advocate had invested $232 million in its four profitable hospitals and just $26 million in the other four. Per bed per year, that’s $14,044 compared to $3,184, so the hospitals that serve a whiter and more prosperous clientele were getting nearly five times as much.
But what if you could also count Advocate’s investments under the $6 million threshold? As Illinois Masonic’s chief executive officer, Susan Nordstrom Lopez, told a near-northwest-side forum in March, “All of Advocate’s investments should be counted, otherwise it’s like counting only half of the ballots.” In the 18-page pamphlet Advocate claims its capital expenditures per bed from 1997 to 2004 are about the same across the system–$35,343 in the city and $38,299 in the suburbs–but for most of these years it doesn’t make complete numbers by hospital available.
When the union counted the numbers it could, it fudged the important distinction between investments over $6 million and those under, relegating the distinction to an appendix. Its report says that Advocate spent $72 million on “significant capital improvements” at suburban Good Shepherd while “spending nothing” at Bethany (on the city’s west side), which is grossly misleading because anyone who skips the appendix won’t realize that “nothing” actually means “nothing in packages larger than $6 million.” In reality, in recent years Bethany has obtained, among other things, an electronic intensive-care unit (as have the other seven hospitals) and had its spaces for mammography and senior citizen programs completely remodeled and upgraded. Advocate has definitely been investing in the place. The union’s sneaky wording obscures the fundamental question: are the city hospitals getting a fair share of Advocate’s investment funds?
Another set of numbers says maybe not. Even though the planning board no longer regulates capital expenditures under $6 million, it still has collected data on total capital expenditures for each hospital since 2000. The four years of data on Advocate show total investment per occupied bed running 2.5 to 1 in favor of the suburbs. That’s not as big a disparity as the union found in the large capital investments, but it certainly doesn’t support Advocate’s claim that its expenditures are about the same in the suburbs and the city.
Capital expenditures pay for the bricks and mortar and machines that make up-to-date health care possible, but they’re not the whole story. In June Advocate proudly announced that during 2004 it spent $245 million providing “community benefits” in its system. That figure includes $135 million for services Medicaid and Medicare didn’t pay for, $50 million in charity care, and $60 million for health and medical education and outreach. The report draws on information from all eight member hospitals, but again it doesn’t break them out by hospital, making it impossible to tell how the funds were distributed.
Since there are more needy patients in the city and near-south suburbs than in the west and northwest suburbs, it seems that a breakdown would show Advocate favoring the city. But spokesman Tony Mitchell won’t give one.
Lacking that comprehensive information, the union has seized on what little there is. On its Web site Advocate lists one kind of community benefit separately for each hospital: “classes and screenings,” which include heart screenings, classes on breast-feeding and money management, stroke-victim support groups, and more. Four times as many classes and screenings are listed for the more profitable hospitals as for the less profitable. On July 28, for instance, the four less profitable ones listed a total of 184 such events through the end of the year, while the four moneymaking ones listed 734.
In a July interview Tony Mitchell said, “Trying to parse whether everything is exactly equal on a dollar-for-dollar basis is a very narrow and perhaps not fully accurate view.” He suggested that quality of care should be considered too. So what does the publicly available information show about that?
As a system Advocate ranks well above average in the nationwide hospital-quality ratings published on the Web by the Joint Commission on Accreditation of Healthcare Organizations (jcaho.org) and the U.S. Department of Health and Human Services (hospitalcompare.hhs.gov). The HHS’s more detailed site measures each hospital on how often it reported taking 20 “recommended care” measures for patients discharged during 2004. How often, for instance, did each hospital advise heart-attack patients to stop smoking? The best did so 100 percent of the time, the average 74 percent. In the Advocate system, Trinity and Masonic fell below average, giving this advice only about half the time, while three of the suburban hospitals did so over 80 percent of the time. (The other three hospitals had too few patients in this category for the percentages to be meaningful.)
This is fairly typical of the big picture as shown on the HHS Web site. With eight hospitals and 20 recommended-care measures, the Advocate system had 160 chances to score above average. It scored below average 45 times, and 27 of those scores belonged to the less profitable hospitals. By this measure the less profitable ones were offering a slightly lower quality of care, though only when offering care to heart-attack or heart-failure patients; the two groups scored about even when it came to pneumonia and preventing surgery infections.
At a public hearing on Advocate’s investment policies on March 15 in the City Council’s chambers, Tony Mitchell invited everyone there to visit Trinity or Bethany and then “take a stroll around the neighborhood. See what decisions other institutions made when the neighborhood changed–they bolted the doors and left no forwarding address.”
Of course he’s right that Advocate deserves praise for sticking around. And the union and community groups are right when they say that keeping city hospitals open isn’t enough. In a health care system that’s squeezing the poor, a network like Advocate that’s trying to help the poor instead of becoming an all-suburban hospital chain may always be vulnerable to accusations that it’s not doing enough. But it’s hard to see how Advocate helps its case by keeping the relevant data to itself.
Art accompanying story in printed newspaper (not available in this archive): photo/Joeff Davis.