Aid cuts peril hospitals here

Hospitals here might be in critical condition financially as aresult of sharp cuts in Medicare and Medicaid payments, a nationalsurvey by the American Hospital Association suggests.

Medicare is federally funded aid for the elderly; Medicaid is afederal and state program for the poor.

Jan Shulman, a hospital association spokeswoman, said hospitaloperating margins - the difference between expenses and revenues -were half what they were last year and have reached the "dangerlevel" nationally.

Citing drastic reductions in Medicare payments to hospitals,Shulman added that "all hospitals have a breaking point, and many areapproaching theirs now."

Alan Sprintz, senior vice president of the Metropolitan ChicagoHealth Care Council, agreed that Chicago follows the national trend.

"The public needs to know that their health care is at stake,"he said.

Since 1983, Medicare has been the target of federal budget cutstotaling nearly $21 billion. At the same time, wages for hospitalworkers were up 9 percent, compared with 7.4 percent last year.

Several Chicago area hospitals contacted Tuesday said they feelthe crunch from dwindling state and federal aid.

"This year, we are actually losing money on every Medicaid andMedicare patient that we treat," said Jim Lipinski, controller ofNorthwestern University Hospital.

Ivan Dee, a Michael Reese Hospital spokesman, said the hospitalhas had to make staff and budget cuts because of decliningassistance. If the trend continues, he said, "We might have tomonitor Medicaid and Medicare admissions very closely."

For neighborhood hospitals with 100 beds or fewer, the situationmay prove worse.

"It is a trend that inner-city hospitals here have had to face,"said Patrick DeMoon, administrator of the Central Community Hospital,5701 S. Wood. "We have had to cut a number of employees or services.We may have to re-evalute our admissions policy."

DeMoon said he fears the neighborhood hospital may die, whichwould increase unemployment and impair community health care.

Doreen Karalis, controller of Mount Sinai North Hospital, 2451W. Howard, said one recent patient had an $80,000 hospital bill.Medicare paid $15,000 and the hospital had to absorb the rest.

The hospital, formerly called Bethesda, recently merged with anational health chain. "If this hospital had to stand alone, we wouldbe closed," Karalis said.