The Illinois Health Facilities Planning Board doesn’t take kindly to hospitals hoarding cash, especially when providers of medical care often complain about being financially squeezed.
So when Shriners Hospitals for Children, Chicago told the board its coffers are bursting with about 7,000 days worth of cash on hand, observers thought administrators of the Far Northwest Side facility would be taken to the woodshed. By comparison, the state suggests hospitals have only enough to cover 90 days of operations.
But board members went easy on Shriners because the facility doesn’t charge for medical care and won’t dent patients’ pocketbooks once it spends $32.4 million on a modernization project.
“One of the questions was, `How can you teach the other hospitals to do that?’ ” recalled Shriners Hospital administrator Jim Spang.
Shriners hospitals fund medical-care expenses and capital improvements from charitable donations and an $8.5 billion national endowment, Tampa, Fla.-based Shriners Hospitals for Children.
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“They never charge a patient and they have a great bottom line and that’s something we have never seen before,” said Pam Taylor of Danville, chairwoman of the health planning board for the last 20 years. “They really do what a not-for-profit hospital should be doing. It’s just great.”
Spang said the days of cash on hand reported to the planning board were figured based on the balance sheet of the Tampa-based Shriners Hospitals for Children, the not-for-profit corporation that owns the Chicago facility and 21 other hospitals in the United States, Canada and Mexico.
The Chicago facility, which has an annual budget of $22 million, specializes in pediatric orthopedics, reconstructive surgery and spinal-cord injuries.
The project includes a two-story addition, which includes more space for outpatient-care services, to the existing 60-bed long-term medical-care facility. The hospital will also upgrade several areas, including surgery and physical therapy departments and clinic space.
“One of the things that came across loud and clear (from the board) was an understanding that if we weren’t here, someone else would be having to pick up $22 million worth of services,” Spang said. “It really didn’t matter how many dollars we have in cash or marketable securities at that point.”
Making a fine point: When is a fine not a fine?
Abbott Laboratories insists that the $100 million payment it agreed to fork over to the government to settle allegations that it failed to meet federal quality standards in its diagnostics division is not–the company repeats not–a fine.
As part of the accord reached last week with the Food and Drug Administration over practices at its North Chicago facility, Abbott and the FDA agreed to terms describing the nine-digit payment as “not a fine, penalty, forfeiture or payment in lieu thereof.”
Further, Abbott called the payment an “equitable monetary relief payment,” while the FDA’s press release described it as an “equitable remedy of disgorgement.”
The FDA said the payment was the largest ever by an FDA-regulated company for a civil violation of the Federal Food, Drug and Cosmetic Act.
For what it’s worth, Random House Webster’s Dictionary defines a fine as “a sum of money imposed as a penalty for an offense or dereliction.”
Sale: Riveredge Hospital, a 96-bed psychiatric facility in west suburban Forest Park, will be sold for $4 million to Cherry Hill, N.J.-based Aeries Healthcare Management Services. Riveredge is one of two remaining Chicago-area psychiatric facilities being sold by Columbia/HCA Healthcare Corp., which has already disposed of five acute-care hospitals here. Columbia is scaling back operations in the wake of a nationwide fraud probe and leaving markets such as Chicago where the company isn’t a dominant player.
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Contact Bruce Japsen by e-mail at [email protected]