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August 16, 2017

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Five public health systems in other cities serve as model for UMC

While Clark County commissioners spent the past decade studying, debating and then studying some more about what to do with University Medical Center, public hospitals around the country have been adapting to the evolving health care landscape.

One of the major changes undertaken in cities such as Atlanta, Minneapolis and Denver was to get government out of the hospital and give oversight responsibilities to an independent board of experts.

The changes have been accomplished in different ways in different cities — in some, hospitals were spun off into nonprofit corporations, in others they were made into stand-alone government subsidiaries — but the results have generally been positive, leading to increases in philanthropic giving, better care and a more stable financial outlook.

Clark County commissioners are following those leads with a new plan beginning next year to turn over most major governing responsibilities at UMC, including long-term planning and policymaking, to an independent board.

County commissioners hope the new board will help the hospital get its finances under control and put an end to the annual subsidy of tens of millions of dollars from the county to UMC each year. However, many public hospitals elsewhere in the country still rely on millions of dollars from local governments, whether through tax levies or agreed-upon contracts, to finance their operations.

Here’s a look at five public health systems across the country, how they’re governed and how much local government funding they receive annually:

    • Cook County Health & Hospitals System

      Cook County turned control of its Chicago-based hospital system over to an independent board in 2008.

      The county still retains ownership of the system, which includes three hospitals, 16 community clinics and the county public health department.

      The county is also still on the hook for the health system’s budget and contributes $250 million annually from its general fund, much of which is earmarked for specific public health programs.

    • Denver Health

      Denver was one of the early leaders in the shift to an independent board when it transferred its assets at the Denver Health Medical Center to a separate hospital authority in 1997.

      Board members are appointed by the mayor and approved by the city council and are given full oversight of the authority’s operation.

      The health system is anchored by a 525-bed hospital that includes adult and pediatric trauma centers, the city’s medical emergency 911 service and public health functions.

      The hospital receives about $28 million worth of support annually from the city of Denver.

    • Grady Health System

      Dependent on support from two county governments and faced with a large population of uninsured or underinsured patients, Grady Health System in Atlanta transferred its hospital assets into a new nonprofit “public benefit corporation” in 2009.

      The switch has seemingly paid off, as the hospital’s foundation has brought in several large donations totaling more than $100 million and reported a $20 million net profit this year.

      Still, the health system relies on nearly $61 million it receives each year from two county governments per a contractual agreement.

    • Hennepin County Medical Center

      With losses for uncompensated care mounting, a situation similar to UMC’s, officials overseeing Hennepin County Medical Center in Minneapolis began a five-year process in 2002 to transfer ownership and governance of the city’s public hospital to an independent “public benefit corporation” that functioned as a subsidiary of the county.

      The county retained certain powers, including approving the CEO and ratifying budgets, but turned the rest of its responsibilities to the nonprofit’s 13-member board.

      The county continues to pay for a portion of uncompensated care provided at the Hennepin County Medical Center, based on a per-patient formula that averages between $20 million and $32 million per year. The hospital also receives about $10 million annually from the county for capital expenditures.

    • Truman Medical Centers

      Two public hospitals serving the Kansas City, Mo., region have been run by a nonprofit corporation since 1961.

      A 33-member board governs Truman Medical Centers, with appointments made by various government, university and hospital stakeholders.

      The two hospitals that make up the system receive about $8 million annually in combined support from Kansas City, Mo., and Jackson County, Mo., governments. Two voter-approved tax levies provide an additional $10.2 million to the hospital each year.

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