Pursuing Charitable Mission Leaves a Hospital Struggling

Pa Than's chest hurt so much that friends drove him to the emergency room. The hospital they took him to that day last summer diagnosed the Burmese refugee with advanced lung cancer and gave him a prescription for hospice care.

Today, Mr. Than, who is 28 years old and speaks almost no English, is responding to a cocktail of two chemotherapy drugs and a third medicine at a different hospital -- Mount Sinai Hospital in Chicago. His doctor there says the treatment may not cure him, but it should at least give him a shot at surviving another couple of years.

"A young man with a potentially treatable cancer should have the right to choose life-saving therapy," says the doctor, Pam Khosla, division head of the department of hematology and oncology at Mount Sinai.

Mount Sinai has become the medical safety net for a large segment of Chicago's destitute.

Providing all patients, rich or poor, the same standards of care is one way that Mount Sinai tries to live up to its obligations as a nonprofit hospital exempt from taxes. Located amid the blight of Chicago's West Side, Mount Sinai also tries to tackle its community's social ills.

It employs former gang members to warn children away from street violence. Two full-time employees' sole responsibility is to get neighborhood residents to quit smoking. Another group of employees is charged with monitoring teenage mothers to try to delay a second pregnancy and the downward spiral that often accompanies it.

"We can't be part of this community if we're not trying to change people's lives and make it better," says Alan H. Channing, Mount Sinai's chief executive.

While a number of nonprofit hospitals have grown into profit machines in recent years, some, like Mount Sinai, have stuck to their charitable mission but struggled financially. These institutions are usually located in inner cities and not anchored to big nonprofit systems, nor can they rely on government support the way county or state hospitals can.

In return for exemption from local, state and federal taxes, nonprofit hospitals are expected to provide benefits to their community, including charity care for the poor. Surplus revenues are supposed to be channeled back into operations.

Mount Sinai has teetered between a small net income and annual losses as high as $15 million over the past five years. While some large nonprofit hospitals have amassed billions of dollars in reserves, Mount Sinai's days of cash on hand -- a common gauge of a hospital's solvency -- is sometimes measured in hours.

Mount Sinai's struggles reflect in part a paucity of government incentives for nonprofit hospitals to operate in inner cities. Earlier this decade, Illinois introduced a subsidy program to offset losses hospitals incur from accepting Medicaid, the government health-insurance plan for the poor, which often doesn't cover costs. Because of the way it is designed, the program makes higher payments to one of Chicago's richest nonprofit hospitals, University of Chicago Hospitals, than it does to Mount Sinai.

Mount Sinai's precarious finances are reflected in its ramshackle facilities. Paint peels from some ceilings, baseboards are cracked and dingy, and the maintenance chief sometimes jump-starts the antiquated radiator-heat system with a few bangs of his hammer. In one part of the hospital sit the remains of three 1940s-era sit-in phone booths.

Earlier this decade, the federal government threatened to suspend Medicare payments to the hospital unless it made upgrades, including a new sprinkler system in the event of a fire. Mount Sinai couldn't afford the $8 million investment, so the state ended up giving it the money.

"Our good work is not reflected in the cosmetics of our facility," a Mount Sinai spokeswoman says.

Mount Sinai opened in 1919 to serve two goals: provide medical care to Chicago's poor Eastern European Jewish immigrants and give the city's Jewish doctors, who were then discriminated against, a place to train and practice.

In the 1960s, the hospital's neighborhood, known as Lawndale, experienced a dramatic demographic shift that mirrored similar changes occurring across many American cities. The Eastern European Jewish residents left for the suburbs, and African-Americans moved in.

But rather than go to Mount Sinai, which had become known as a white hospital, the neighborhood's black population traveled farther to get treated at other institutions. "Whether it was true or not, they felt unwelcome," says Ruth Rothstein, who started working at Mount Sinai in 1966.

With fewer patients seeking care there, the hospital's revenues fell to unsustainable levels. By 1972, when Ms. Rothstein became chief executive, the hospital's board faced a choice: follow its former clientele to the suburbs, or stay and renew its commitment to the community. The board voted to stick it out.

Ms. Rothstein and her staff hit the streets. They joined community organizations and churches, and helped launch programs to help people purchase their own homes. "There was an understanding that a hospital is not an island to itself," Ms. Rothstein, now 85, recalls.

Prescription for Profit

Today, Mount Sinai is the medical safety net for a large segment of Chicago's destitute. Seventy-two percent of its patients are either uninsured or covered by Medicaid. Only 10% have commercial health insurance -- the only type that gives the hospital a profit margin.

The incidence of heart disease, infant mortality, asthma and HIV in the area surrounding the hospital far outpaces the rates in greater Chicago and the rest of the country. The life expectancy of local residents is a full decade less than the U.S. average. Poverty is rampant.

To the north of the hospital, the neighborhood now referred to as North Lawndale is more than 90% black. In South Lawndale, about 85% are Hispanic. Their choices for health care have been dwindling.

Two years ago, Advocate Health Care, a large nonprofit system with more than $1 billion in cash and investments, shut down neighboring Bethany Hospital and turned it into a long-term care facility. Advocate is in the middle of a $500 million expansion program in the Illinois suburbs.

Spokeswoman Kelly Jo Golson says Advocate determined there was a "surplus of hospital beds and a significant duplication of health-care services" on the West Side of Chicago, and turning Bethany into a long-term care facility served an unmet need in that part of the city. Advocate is spending $60 million to upgrade one of its other inner-city hospitals in Chicago, she added.

Bethany's closure strained an already stretched Mount Sinai. The hospital's emergency room saw an immediate surge in admissions, from 35,000 patients a year before Bethany closed to about 58,000 today. "We couldn't plan for something like that," says Leslie Zun, the hospital's chief of emergency medicine.

Mount Sinai is considering limiting the number of patients it admits who don't live in the area. It spent $16.6 million on charity care last year and another $16.2 million to subsidize specialists, such as cardiologists, who wouldn't otherwise work in the neighborhood because reimbursements are so low.

Those expenditures eat up nearly 10% of its revenues, forcing Mount Sinai to put off investments in new equipment, such as a second cardiac-catheterization laboratory to perform artery-clearing operations that help prevent heart attacks. The cath lab has "been on the table for four years," says Mount Sinai's chief financial officer, Charles Weis. "Heart disease is a community need, but we have to balance the resources."

To try to collect on unpaid bills, Mount Sinai used to sue some patients, who had resources but weren't paying. It filed 119 such suits between 1999 and 2006. But it has since stopped the practice and raised its income threshold to allow more patients to qualify for charity care.

Mount Sinai's emergency room reflects some of the challenge of doing business in one of Chicago's toughest neighborhoods. Digital thermometers are chained to the wall; even so, someone recently ripped one off and walked away with it. The hospital says it spends $20,000 a year replacing stolen equipment.

Dr. Zun, who has worked at Mount Sinai for over 20 years, wants to buy his staff the cellphonelike devices that many ERs use to speed up communication between doctors and nurses. But, at $7,000 for a full set, "it's a luxury we can't afford," he says. Instead, he and his colleagues rely on bulky older cordless telephones with spotty reception.

The Mount Sinai ER is sometimes referred to as the "knife and gun club" because of the frequent stabbings and shootings it handles. A few years ago, Dr. Zun hired a violence-prevention worker to help teenage gunshot victims treated at the hospital get back on track. He says the results were promising, but grant funding dried up and the program was canceled.

The hospital continues to combat violence through another program that employs former gang members in wheelchairs to mentor neighborhood youth. The program's head, Devoy Boyd, was shot in the back when he was 17, paralyzing him from the waist down.

On a chilly November afternoon, Mr. Boyd, now 31, wheeled himself into the cafeteria of Learn Charter School, a few miles from Mount Sinai, and faced four dozen sixth-graders. Holding up props, he went into excruciating detail about how he has to use a catheter to urinate. "If you're paralyzed, you have to do this every four to six hours, every day for the rest of your life," he told the children.

"Do it hurt?" one girl asked.

"If you feel below your waist then, yeah, it hurt," Mr. Boyd answered.

It's difficult to know how much of an impact Mr. Boyd has on these children. When he spoke to a group of troubled teens about to be released from a juvenile detention center recently, he says half took his card but only one later reached out to him.

Mount Sinai thinks such programs do pay dividends. By helping convince children to stay in school, get jobs and become productive members of society, the hospital says the programs cut down on crime and poverty, contributing to the community's welfare and health. Mr. Channing, the CEO, says some kids may even someday become paying clients.

There's another economic incentive: Patching up gunshot wounds is an unprofitable line of work. Each shooting victim costs up to $12,000 to care for, and the patients rarely have health insurance or qualify for Medicaid.

Some of Mount Sinai's other programs are actually detrimental to its bottom line. Because Mount Sinai is a designated children's hospital and level-one trauma center, Medicaid pays it higher rates for a small number of cases, such as children needing emergency attention. So when children with asthma come to its emergency room, Mount Sinai makes money caring for them. But the hospital employs educators to coach families of asthmatic children on how to control the disease and avoid emergency visits.

One of the beneficiaries is 4-year-old Roberto Leanos, a frequent ER visitor since he was a baby. Ana Rosa Garcia, the educator assigned to his case, spotted problems when she walked into the Leanos family's apartment in 2007. There was wall-to-wall carpeting -- a breeding ground for dust mites, which can trigger asthma symptoms. Fluffy blankets on Roberto's bed were also problematic. Mrs. Garcia convinced Roberto's mother, Maria Leanos, to rip out the carpet and brought her hypoallergenic sheets and mattress covers.

She also taught the 28-year-old mother how to administer an inhaler to Roberto and gave her an "asthma action plan." It came in handy one evening when Roberto became lethargic. Mrs. Leanos's instinct was to put him to bed, but the action plan said in capital letters to "call for an ambulance now." Minutes after he reached Mount Sinai, his condition worsened and he was put on a ventilator. But he recovered and hasn't had to return to the hospital.

Mr. Than, the Burmese refugee, found his way to Mount Sinai in August when an internist who treats patients for World Relief, an agency that helps refugees resettle in the U.S., decided to get him a second opinion.

Mount Sinai confirmed he had lung cancer and referred Mr. Than back to the hospital that originally diagnosed him, Provena Mercy Medical Center, for treatment. Provena Mercy is located in Aurora, Ill., a small city an hour and a half west of Chicago where Mr. Than lives with three other recently arrived refugees.

Mr. Than wanted to be treated in Aurora because he was making new friends there and could take the bus to the hospital. But Steve Wiggers, Mr. Than's case manager at World Relief, says Provena Mercy told him the cancer was "too far advanced" and recommended hospice care when Mr. Than was readmitted there.

Mr. Than's medical file says Ramesh Kola, the Provena Mercy oncologist who examined him, wrote that he had an "incurable" cancer, "irrespective to treatment." Mr. Than was given a prescription for hospice care signed by another Provena doctor.

While Mr. Than's Mount Sinai doctor says that Provena Mercy didn't give the patient the right to choose life-saving therapy, Provena says that it offered the full range of treatment options.

In an interview, Dr. Kola says hospice care was one of three options he raised with Mr. Than, and that the other two were treatments. Dr. Kola says his consultation note also stated: "we discussed options of supportive care with hospice, treatment with Tarceva and IV chemotherapy."

Provena Mercy is part of Provena Health, a Catholic nonprofit hospital system, that has been at the center of a debate over how much charity care tax-exempt hospitals should provide.

Illinois stripped another Provena hospital, Provena Covenant, of its tax exemptions in 2004 after deeming that it provided too little free care to the poor. Provena fought the ruling, and the case wound its way through the state's courts. The Illinois Supreme Court agreed to hear it last month; a verdict isn't likely until next year.

Provena Health maintains that its charity care is adequate. In a recent statement about the case, it said it provides "vital services every day to those in our community who have no other health care options."

A spokeswoman for Provena Mercy said while she couldn't discuss specifics of Mr. Than's case, "the medical record clearly indicates that the physician did indeed offer this patient clinical options in addition to hospice." She said a "prescription for hospice does not indicate that other clinical care options were not presented to the patient." She also said Provena "does not deny care to any patient."

Mr. Than ultimately received chemotherapy at Mount Sinai. Dr. Khosla, of Mount Sinai, says the cancer has shrunk mildly after two rounds of chemo.

So far, Mr. Than's care has cost Mount Sinai about $34,500. Though he temporarily qualifies for Medicaid as a political refugee, the hospital doesn't expect the government program to reimburse it more than $22,700.

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