The U of C Medical Center (UCMC) sent a final response on Friday to Senator Chuck Grassley’s (R-IA) investigation into its finances, which probed whether regulations for non-profit tax-exempt status should be amended to exclude hospitals who are neglecting their communities. The UCMC’s response elaborates on an initial response of over 1,000 pages, sent in mid-October.
Grassley’s criticism of the UCMC focuses on a controversial program launched by then–vice president of community and external relations Michelle Obama in 2005. The program directs emergency room patients with noncritical conditions to seek medical care closer to home.
The ranking member of the Senate Finance Committee, Grassley has been examining the hospital’s charity care policy as part of a larger investigation evaluating whether the Internal Revenue Service (IRS) should reinstate quantitative rules for what constitutes charity care when hospitals apply for tax-exempt status. Currently, qualification for tax-exempt status is based on “community benefit,” rather than on the amount of money spent on charity care.
“The IRS regulations were pretty much watered down to nothing,” said Jill Kozney, Grassley’s director of communications. According to Kozney, the IRS determined in 1969 that there was less need for charity care after the introduction of Medicare and Medicaid because the government would handle payments for the care of the uninsured.
According to documents prepared by Grassley, the community benefit standard requires an emergency room open to all, an open medical staff policy, a board of directors drawn from the community, treatment of patients on Medicaid and Medicare, use of surplus funds to improve patient care, and the provision of medical training, education and research.
The UCMC program Grassley has attacked, the South Side Health Collaborative, helps UCMC emergency room patients with non-emergency conditions find medical care near their home. The program also helps eligible patients register for Medicaid or Medicare and aims to inform them of their health care options.
“The emergency room is not a great place to get anything other than emergency care. You don’t get primary care, and you don’t get preventive services like screening for HIV or breast cancer,” said Eric Whitaker, UCMC executive vice president for strategic affiliations and associate dean for community-based research. “Given the scarce resources of the health system, we cannot afford to spend an enormous amount on people who get care in an inappropriate setting.”
But this program has its skeptics, who have criticized this program since September.
“It is pushing routine or chronic illnesses into community hospitals around the University and is keeping the unusual and interesting cases for the hospital,” said Toni Preckwinkle, alderman for the fourth ward, which contains parts of Hyde Park. “I don’t know that it is always in the interest of the communities that I serve.”
Preckwinkle told the story of her daughter-in-law’s younger sister, who took her son to the emergency room in an ambulance. He was vomiting and could not stand up or walk.
“They spent the entire time in the emergency room trying to discourage him from entering and telling her to take him home,” Preckwinkle said. “This has been very discouraging to me.”
Grassley has made similar characterizations of the program.
“The hospital appears to be culling the least profitable patients from its emergency room,” Grassley said in a September statement.
But hospital administrators contend that the program benefits the community by saving uninsured patients from the hospital’s high costs. Whitaker said that as a teaching hospital, UCMC’s operating expenses are up to 60 percent higher than a community hospital. Also, UCMC is the only hospital on the South Side to perform certain complex medical procedures.
“People would come here for their general pneumonia, and we ended up not being able to be of service for those who needed sub-specialized services which only we can provide,” Whitaker said. “This meant for our partner hospitals that we actually took business away from them as a consequence of us taking on general care.”
A year ago, the need for empty beds caused the hospital to turn away half of its prospective patients in need of special care, according to Whitaker. With the program diverting a greater number of non-emergency cases toward community hospitals, the hospital can take 90 percent of the complex transfer patients.
Another of UCMC’s defenses is that the hospital provides grant money to clinics and hospitals on the South Side.
Despite intense criticism, the UCMC will not be making any changes to the program.
“The fact is that what we’re are doing is good public policy,” Whitaker said. “We have not had to change or adapt what we are doing because we believe that we did the right thing in the first place, and we have no need to adapt.”