Illinois has rare authority over hospital closures

CHICAGO — Cook County officials, facing a multimillion-dollar budget deficit, are begging to close a hospital that serves the poor in Chicago's southern suburbs. But no hospitals can shut down in Illinois until a nine-member state board gives the green light.

The panel — the Illinois Health Facilities and Services Review Board — wields a rare authority over hospital closures, one that doesn't exist in most states. The board is scheduled to vote Tuesday on Cook County's proposal to shut down Oak Forest Hospital and turn it into an outpatient center. It rejected a similar request in May.

Emotions surrounding the decision have run high; the board initially rejected Cook County's closure plan after patients and union workers loudly protested that it would hurt health care in the already underserved area. But largely overlooked in the debate is how the board's power is a rarity in government regulation.

Only a handful of states — among them, Connecticut and New Jersey — require hospitals to obtain “certificate of need” approval before shutting down. In Tennessee, only hospitals designated critical in rural areas must get state approval to close.

“It is unusual for a state law to require a CON for closures of hospital services,” Duke University law Professor Emeritus Clark Havighurst said. “It would seem in these tough times that municipalities like Cook County ought to be free to make spending choices without state regulators' interference.”

But a board member of the American Health Planning Association, Pennsylvania-based consultant John Steen, said there's value in opening a hospital closure decision to public scrutiny, which happens during the CON process.

“The point is it gets aired,” Steen said. “It makes government more accountable to its own constituents, to public oversight. It's the value of democracy itself.”

The Illinois board's primary role is to approve new health care services such as dialysis centers, nursing homes and hospitals. By law, the board's decisions are based on whether there's a documented need for the service. The goal is to control health care costs and avoid duplication.

Like similar bodies in other states, the Illinois board is the subject of continuing controversy about whether it has too much power — and should even exist.

While bills are filed each year to eliminate certificate of need requirements, the number of states that require them has stayed around 36 because the bills have failed, Richard Cauchi of the National Conference of State Legislatures. However, some states have decided to limit CON authority, he said.

Most approve and deny new hospital construction, but only a few have authority over hospital closures.

Illinois Sen. Bill Brady served on a task force to reform the Illinois health planning board in 2008 after it was tainted by a kickback scandal that eventually helped bring down former Gov. Rod Blagojevich. Brady questions why the board has the power over hospital closures.

“I've never understood the rationale of forcing someone to continue operations under a free market system,” said Brady, a Bloomington Republican who lost to Gov. Pat Quinn in the race for governor last year. “I don't think that's an appropriate function of the board.”

Cook County officials have criticized the system for derailing their cost-saving plan to convert the facility to a regional outpatient center. Cook County says operating the hospital is no longer financially viable, and the county faces a $315 million budget deficit.

But the Illinois Department of Public Health says closing Oak Forest Hospital would increase shortages of ICU and long-term care beds in the already underserved area.

There are reasons to doubt that Oak Forest patients will be referred to nearby private hospitals for inpatient care, said Lynda DeLaforgue, co-director of Citizen Action Illinois, a group that's been fighting the hospital closure.

“Although the county wants to have us believe those other hospitals are going to do their part by taking patients, the plan is to have them shipped over to Stroger,” the county's flagship hospital in Chicago, DeLaforgue said, pointing to county documents as evidence.

Still, private, nonprofit hospitals that get tax breaks in exchange for providing charity care have a legal obligation to take more poor patients if Oak Forest Hospital closes, said Dr. Quentin Young, Illinois' public health advocate. Young said he supports the closure of Oak Forest Hospital and its conversion to an outpatient clinic.

“It isn't as though there's a good choice or a bad choice,” Young said. “It's what to do with limited resources.”