The exterior of the squat beige building just over the Illinois line in Hobart, Ind., resembles a thousand other nondescript offices dotting the Midwest. But inside, going about their business, are a group of renegade nuns.
Just last winter, the sisters of the Poor Handmaids of Jesus Christ defied Cardinal Joseph Bernardin and allowed doctors at a hospital on Chicago’s West Side to form an alliance with doctors at two non-Catholic medical centers. The alliance shored up St. Elizabeth’s, the struggling hospital that the Indiana-based order operates.
Bernardin feared that in their quest to strengthen St. Elizabeth’s, the nuns would harm Chicago’s 18 other Catholic hospitals. So he ordered the Poor Handmaids to call off their deal.
But the sisters refused, and Bernardin threatened to strip the hospital of its Catholic status, a kind of institutional excommunication. He died before settling the quarrel, which is before a church mediation panel.
“They can’t remove our Catholicity; they can’t make us take down the crucifixes,” said Sister Kathleen Quinn, the defiant chairperson of Ancilla Systems, the Poor Handmaids’ health-care system.
Along with the schools and the parish churches, the hospitals are one of the three crucial institutions in Catholic life in Chicago. They treat nearly 30 percent of all hospital patients in Cook and Lake Counties. More important, they have a special mission to serve the poor.
But the hospitals, while part of the archdiocesan fabric, are not run by the archdiocese. They are run by the orders of nuns who own them, but the archbishop has spiritual guidance over them. This jurisdictional divide lies at the heart of the St. Elizabeth dispute.
Unlike most problems facing the church around the world, the issues surrounding Catholic hospitals are unique to the United States. Most countries lack America’s separation of church and state and, hence, of public and Catholic health care. In addition, most countries have national health systems, and Catholic hospitals there occupy relatively small niches in the larger structure of state-financed medicine.
Catholic hospitals in America are different. The traditional separation of church and state has given these hospitals an independence and a separate role in U.S. health care. But this has not protected the hospitals from the changes in American health care–especially in its financing–that underlie the struggle between the Poor Handmaids and the Chicago archdiocese. In fact, the dispute illuminates many questions bedeviling Catholic hospitals nationwide as they cope with the new era of bottom-line medicine:
Do Catholic hospitals differ significantly from hospitals affiliated with other religious denominations? Do we need as many Catholic hospitals as we have? Should Catholic hospitals exist at all or are there more effective ways to provide health care to the poor? Can Catholic hospitals strike alliances with non-Catholic hospitals, perhaps even merge with them, or is this supping with the devil?
Chicago’s Catholic hospitals operate in vastly different neighborhoods, from ghettos to the Gold Coast, and serve different populations, rich and poor, black and white, Catholic and every other religion in the city. Some of these hospitals are relatively secure; others struggle to stay alive.
The varying routes to maintain solvency taken by St. Elizabeth’s and other hospitals in the city show that solutions are far from a one-size-fits-all proposition.
St. Bernard Hospital, founded in 1904 to serve the Irish of Englewood, now cares for a mostly poor, black population that is only 1 percent Catholic. Yet it shows an annual surplus, largely because it has no competition for miles and because of savage cost-cutting.
Sorting out the arguments on all sides of the St. Elizabeth’s issue is hard because even some church officials feel that Bernardin’s chief suggestion for the hospitals’ survival–to form alliances among themselves–glossed over the complexities each hospital faces.
“Bernardin had a visionary plan, but the details have not been worked out,” said Rev. William Grogan, a Chicago priest and an attorney with the firm Hinshaw & Culbertson. “What he’s said is not wrong. It’s just not yet adequate, and the demands of the very volatile health-care market right now are such that (hospitals) can’t wait.”
Bernardin’s successor must likely make Solomonic decisions that help determine which hospitals live, which die and whether any more face church sanctions.
St. Elizabeth’s, an older 240-bed hospital in Wicker Park, first tried to merge with nearby St. Mary of Nazareth Hospital Center– seemingly in line with the cardinal’s objectives–but was twice rebuffed. The head of St. Mary’s, a bigger, modern 16-story facility three blocks south, claims such a merger would have caused financial disaster for both hospitals.
So Quinn said St. Elizabeth’s had no choice but to seek an alliance with non-Catholic hospitals.
Bernardin felt such alliances put Catholic hospitals in direct competition with non-Catholic institutions that potentially could shift the primary purpose of medicine in Chicago from a healthy patient to a healthy bottom line.
“When the provider is at financial risk for treatment decisions, who is the patient’s advocate?” Bernardin asked in a 1995 speech advocating non-profit health care.
Bernardin did not ban alliances between Catholic and non-Catholic hospitals, but he said any such alliance must preserve not only the Catholic mission but also the “ministry” of the archdiocese.
The cardinal’s hope was that all 19 Catholic hospitals in his archdiocese would form an alliance, Unified HealthCare Network. So far, only seven have done so.
The aggressive concern of the archdiocese came as something of a surprise to the Poor Handmaids and is a barometer of the life-and-death issues facing Catholic hospitals. For decades, these institutions were run by nuns with little interference or attention from the archdiocese.
The Poor Handmaids used to run two other hospitals in Chicago–St. Anne’s and St. Anne’s West–but closed them in 1988. The archdiocese offered neither help nor opposition.
“At the time, we formally notified the archdiocese,” Quinn recalled. “Their response was, `That’s your baby.’ “
Independence a problem
Most Chicago Catholic hospitals were established in the late 19th or early 20th Centuries to serve the waves of Catholic immigrants. With the Catholic schools and the parishes, they formed the triptych of Catholic life in Chicago.
But unlike most schools, the hospitals were not owned and run by the parishes or the archdiocese but by the order of nuns that sponsored them. The church invited them into the immigrant neighborhoods, but it gave them little or no funding.
This gave the nuns and their hospitals an independence from local bishops that other arms of Catholic life lacked. It also created a murky legal relationship with these bishops that has complicated the ability of leaders such as Bernardin to direct the hospitals.
In the last 30 years, changes in society, in the church and in health care have hurled the hospitals into a new world.
First, the neighborhoods changed. As descendants of the immigrants moved out, they sometimes were replaced by other Catholic immigrants, Mexicans, for instance. More often, they were replaced by blacks, few of them Catholic.
Also, changes in governmental programs such as Medicare and Medicaid revolutionized health-care financing. In years past, Medicare, Medicaid and private insurance reimbursed just about whatever a hospital charged. That allowed some hospitals to shift costs– covering the expenses of uninsured patients by overcharging those who were insured. But in the early 1980s, with health-care costs ballooning, the insurance programs began reining in spending. That made health care for the poor–a cornerstone of the Catholic mission–much harder to afford.
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Finally came the trend toward managed care and health maintenance organizations (HMOs), with their focus on the bottom line.
These changes pressured every hospital and medical practice, but they especially taxed inner-city Catholic hospitals, which were often run by nuns with more faith than business acumen.
Some medical centers collapsed. Four Catholic hospitals have closed in Chicago in the last eight years, and another–Loretto–was sold. Some survivors merged. Others changed, fast.
Across the country, for-profit chains saw a chance to expand and began buying hospitals, including some hard-pressed Catholic hospitals. In Rochester, Minn., Kenosha, Omaha, Milwaukee and many other dioceses–Catholic hospitals agreed to share services or even merged outright with non-Catholic institutions.
“We’re doing this because the sisters are a dying order,” said Tami Rakow, a spokesperson for St. Mary’s Hospital in Kenosha, which was sponsored by the Dominican sisters. “By going with a non-Catholic hospital, we can preserve this Catholic mission.”
Surprisingly, the issue of abortion has been almost no problem. Catholic opposition to abortion is so clear that no potential non-Catholic partner would suggest that it be compromised. Generally, Catholic hospitals seeking partners prefer those that also shun abortions or set up arm’s-length relationships that avoid any taint.
But just as the changes have taxed the ability of Catholic hospitals to deliver health care, they complicated Bernardin’s dream of uniting Chicago’s Catholic hospitals into a mission driven by efficiency and faith.
A combination that fits
No merger is painless, even between Catholic hospitals. But they can work.
A year ago, Sister Theresa Peck oversaw the merger of St. Joseph and Columbus Hospitals on the Near North Side and St. Anthony Hospital on the West Side into the Catholic Health Partners.
Trained as a nurse, Peck also is an MBA and, since 1993, had been chief executive officer of St. Joseph. Today, she is CEO of a $300 million corporation and, regarding staff, likes to say that she budgets “5-point-2 FTEs (full-time equivalents) per adjusted patient day.”
It sounds hard-nosed, and it is. About 300 employees, mostly in management, lost jobs in the merger. Transportation, purchasing and information services have been merged. Clinical services are being consolidated.
“This stuff hurts,” Peck said, “but just for a little while.”
The necessity for tough management style is rooted in Catholic philosophy.
“We believe in the healing ministry of Christ,” Peck said. “What we do here has to be based on our faith-based principles, which means not turning anyone away.”
The three hospitals in Catholic Health Partners provide about $8 million per year in free care for those without Medicaid or insurance.
“On our balance sheet, charity care is a line item,” she said.
St. Bernard Hospital has an even bigger load of charity care, but it has managed to survive without merging.
In many ways, St. Bernard represents the broadest mission of a Catholic hospital because health care is only part of its mission. It is the largest employer in Englewood, a community where many once-prosperous homes have been razed or fallen into disrepair. It has kept its doctors by replacing their isolated and dangerous offices with new ones in the hospital. It keeps a storeroom of baby clothes and toys for new mothers who have neither. It opens a conference room to neighborhood groups “because they feel safe coming here.”
Its cafeteria serves about 700 meals a day, feeding not only patients and their families but also neighborhood kids and homeless men who come in for their only hot meal of the day.
Despite this, St. Bernard runs a surplus, the result of cost-cutting brought on by a financial crisis five years ago.
St. Bernard, like most hospitals, has always needed money, as a 1914 stained-glass window in the hospital chapel attests. It reads: “Pray for Donors.” But during the late 1980s, officials were forced to be exceptionally tight-fisted. The hospital renegotiated every contract with suppliers. It cut out its public relations staff and consultants, laid off 80 of its management staff, and hired its own nurses, mostly from abroad, rather than pay an agency.
Mission creep
Quinn and the Poor Handmaids remain determined to maintain the partnership between doctors at St. Elizabeth’s, the University of Chicago Health Systems and MacNeal Health Network so they can more easily recruit patients with insurance, the lifeblood of modern health care.
But the alliance could hurt nearby St. Mary’s Hospital, its director, Sister Stella Louise Slomka, believes. Bernardin seemed to agree.
The hospitals are only three blocks apart and share 45 doctors. Slomka fears these doctors may be more likely to refer patients with insurance to St. Elizabeth’s, now that it is part of a network that can offer more extensive services and specialists.
“It’s the physicians who determine where the patient goes,” she said. “We’d like to capture people living in our immediate neighborhood.”
The Poor Handmaids say there’s no evidence the alliance has weakened St. Mary’s.
Moreover, they reject the idea that the archdiocese needed to become involved: It was strictly a matter of business–and therefore their own–not a matter of faith. What’s more, the alliance, far from hurting their Catholic ministry, was the only way to preserve it, Quinn insists.
“There is no merger of assets . . . we’re not giving up anything,” she said. “It’s on a business level versus a church level. It’s necessary to maintain the overall mission we see and the services that St. Elizabeth’s gives.”
“What the cardinal tried to accomplish in strengthening Catholic health care is very good,” Quinn said, “but the `how’ of what he tried to accomplish may be questionable.”