Report: Chicago’s safety-net hospitals could lose nearly $1.8 billion by 2024

Chicago’s safety-net hospitals will collectively bear $1.76 billion in compounded operating losses by 2024, according to a new report by the Health Care Council of Chicago.

Those losses do not take into account additional stresses, including financial duress from the COVID-19 pandemic, a deepening recession or other substantial changes to volumes or costs since 2018. The report’s modeling is based on financial data from 2015 through 2018.

“Chicago’s safety-net status quo has run out of runway,” David Smith, CEO of Third Horizon Strategies and co-founder of the council, said in a statement.

Despite subsidies intended to maintain the financial vitality of safety-net hospitals, the report found that health outcomes have not generally improved on Chicago’s south and west side, and there remains a significant disparity in accessing health services in those communities as compared to the rest of the city.

Additionally, officials said the structural integrity of the safety-net hospitals are at a “fracturing” point

“Without meaningful transformative action from the market and policymakers, already scarce health services for south and west side residents are at risk of further erosion,” said Karen Teitelbaum, CEO of Sinai Chicago.

The report lays out considerations for policymakers to address the issue, as well as factors that support institutes taking transformative action now. Those factors include accessing the transformation funding the General Assembly approved last month.

“If done right, capital can be better focused to equip institutions with the resources that serve their highest and best needs in the community rather than closing their doors to those in most need,” said Cheryl Lulias, CEO of Medical Home Network.

The council will host a free virtual event on March 18 to go over the report’s findings.