HSHS leader brings experience to hospital association board

Jan. 19--Preserving and improving Medicaid funding for Illinois hospitals and protecting the Affordable Care Act will be priorities this year for Mary Starmann-Harrison.

The newly installed chairwoman of the Illinois Health and Hospital Association's board of trustees outlined those plans during an interview last week at the rural Springfield headquarters of Hospital Sisters Health System, where she has been president and chief executive officer for almost eight years.

The IHA, based in Naperville with additional offices in Springfield, Chicago and Washington, D.C., is one of the most powerful advocacy and lobbying groups in the state Capitol.

Starmann-Harrison is the first HSHS official to lead the group's unpaid board. Edgar Curtis, CEO of Springfield-based Memorial Health System, was the IHA board chairman in 2017.

"I'm committed to, and passionate about, health care," Starmann-Harrison said, "and I see IHA's role in advancing access to high-quality health care for all of the citizens of Illinois as extremely important, so I wanted to be a part of that."

In her role at HSHS, Starmann-Harrison, 64, leads a not-for-profit system with nine hospitals in Illinois -- including HSHS St. John's in Springfield, HSHS St. Mary's in Decatur and HSHS St. Francis in Litchfield -- and six hospitals in Wisconsin. The system employs 14,344 people -- 3,053 of them at St. John's -- and posts total annual revenues of $2.4 billion.

Born in Chicago and raised in Evergreen Park, Starmann-Harrison began her career as an emergency room registered nurse and previously served as the regional president and CEO of SSM Health Care of Wisconsin, another Catholic system.

The Springfield resident received total compensation of $1.37 million in the fiscal year ending in June 2016, according to HSHS' most recent IRS Form 990 report.

A.J. Wilhelmi, IHA's president and CEO, said Starmann-Harrison is a "bold thinker with a keen understanding of the hospital community and the work of the association."

Wilhelmi said Starmann-Harrison has served as chairwoman of the Wisconsin Hospital Association and as a board member for the American Hospital Association.

He said Starmann-Harrison is "a highly regarded and well-respected leader in the hospital community locally and nationally. Her ability to build relationships and navigate the political environment will be instrumental in leading our work to ensure that all Illinoisans have access to high-quality health care in their communities."

Medicaid, which accounts for an average of 20 percent of hospital inpatient revenues and 12 percent of outpatient revenues in Illinois, is a major focus for IHA when it comes to state policy, Starmann-Harrison said.

About half of the $22 billion-a-year Medicaid program in Illinois is funded by the federal government, with the other half coming from state revenues.

The state's more than $7 billion backlog in bills to state vendors, including Medicaid providers, is a concern for hospitals, Starmann-Harrison said.

The bill backlog peaked at $16.7 billion in 2017 -- in because of a two-year state budget impasse involving former Gov. Bruce Rauner, a Republican, and the Democratic-controlled General Assembly.

A $6 billion borrowing plan authorized that same year reduced the backlog and helped hospitals throughout the state, including HSHS St. John's and eight other HSHS hospitals, Starmann-Harrison said. HSHS was owed $138 million at the peak of backlog.

But delays in payment for Medicaid patients and patients have grown since then, so HSHS and the hospital association wants to work with Gov. J.B. Pritzker, a Democrat, on long-term solutions to reduce the backlog, Starmann-Harrison said.

"Continuing to have adequate funding for Medicaid is always important," she said. "It's always a challenge, and we want to make sure we're working closely with the new administration to continue our efforts along those lines."

Although Starmann-Harrison hasn't met with Pritzker, she said she believes the new governor will be an ally to promote healthy hospitals and healthy patients.

"He's very committed, I think, to taking care of all people in the state," she said.

Last year's renewal of the hospital assessment program by the General Assembly and federal government was a "big win" for the Medicaid program, she said.

Under the redesigned program, Illinois hospitals pay a tax, or "assessment," of $1.5 billion annually. That money generates an additional federal match of $2.25 billion annually, allowing the state to pay for $3.75 billion in Medicaid services.

Starmann-Harrison said she wants to pursue even more ways of boosting Medicaid funding for hospitals to improve services.

At the federal level, IHA is working to preserve and improve Medicaid and Medicare funding, contain the rising cost of certain medicines and preserve the federal health-care coverage law, she said.

The ACA, which President Donald Trump and fellow Republicans in Congress tried unsuccessfully to repeal, is "not perfect," according to Starmann-Harrison. "But it sure did provide health care for many people who previously did not have health care."

The ACA's federally subsidized Medicaid expansion in Illinois currently covers 632,000 adults without minor children. Private insurance plans offered through the ACA's health-insurance marketplace in Illinois covered about 335,000 state residents in 2018.

Efforts to overturn the ACA, including a recent ruling by a federal judge in Texas that puts the future of the 2010 law in doubt, are a "concern for everyone, because again, the Affordable Care Act is providing coverage to many people that didn't have previous coverage."

When asked her view of Trump, Starmann-Harrison said: "Everyone cares about health care for the citizens of the United States. While approaches are very different, we've got to work with everyone -- both parties, together, to figure out how we continue to provide high-quality, accessible health-care services to all people. A bipartisan approach is really what's going to make that happen."

Starmann-Harrison said she sees no reason to alter the 2012 state law that allows not-for-profit hospitals to count much more than charity care when they annually justify their property tax exemptions.

The law's constitutionality was upheld in 7-0 rulings by the Illinois Supreme Court in September 2018 and March 2017.

Charity care -- which is discounted or free care -- cost Illinois hospitals $805.5 million in 2017, or 2.1 percent of total net revenues, according to the Illinois Health Facilities and Services Review Board.

In addition to charity care, hospitals are allowed under the law to count subsidies for health-care services for the poor, community education programs and the difference between the cost of care and what Medicaid pays when hospitals file documents arguing that the value of such services exceeds what they potentially would pay in property taxes.

Starmann-Harrison noted that 40 percent of Illinois hospitals -- the vast majority of which are not-for-profit -- post negative operating margins or "very meager" margins. Some hospitals could afford to pay property taxes, she said, but 40 percent of hospitals probably couldn't afford to do so, she said.

Those that could afford to go onto property tax rolls "would probably have to adjust how they operate and maybe not be able to provide some of the services that they currently provide," she said.

St. John's, the flagship hospital for HSHS, posted total revenues of $529.8 million in the fiscal year ending in June 2018.

The 415-bed hospital posted about $22.1 million in revenues exceeding expenses. That figure equates to a profit margin of about 4 percent, according to HSHS financial statements.

Contact Dean Olsen: dean.olsen@sj-r.com, 788-1543, twitter.com/DeanOlsenSJR.

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