McHenry County Blog

In the pleas agreement between the U.S. Attorney’s Office and Jacob Kiferbaum appears the following:

Planning Board/Mercy Hospital

Hospital proposed for Crystal Lake by Mercy Health System.

[Stuart] Levine solicited a kickback of approximately $1.5 million from [Jacob] Kiferbaum relating to the construction of Mercy Hospital’s Crystal Lake facility.

Kiferbaum agreed to pay a kickback, with the exact amount and manner of the payments to be determined at a later date.

At Levine’s direction, the kickback proceeds were to be paid to Individual 1 pursuant to a sham consulting contract.

Levine agreed to and, according to Levine, did use his influence with the Planning Board to ensure that Mercy Hospital would and did receive approval of its application to build the Crystal Lake facility after it contracted with Kiferbaum Construction Company to build that facility.

In or about late 2003, Levine and Kiferbaum agreed that Levine would use his position as a Planning Board member to influence the Planning Board to approve Mercy’s application, if Mercy gave Kiferbaum Construction Company the construction contract – of approximately $49 million – to build Mercy’s proposed hospital.

In exchange, Levine asked Kiferbaum for a kickback of approximately $1.5 million, to be paid at Levine’s direction.

Kiferbaum agreed to pay a kickback, with the exact amount and manner of the payments to be determined at a later date.

On or about January 23, 2004, approximately one month after the Planning Board had made known its intent to deny Mercy Hospital’s application to build the Crystal Lake facility, Kiferbaum and Mercy Hospital signed a construction contract, agreeing that Kiferbaum Construction Company would build the new hospital for Mercy.

On or about April 21, 2004, the Planning Board voted in favor of granting Mercy’s application for a permit to build a new hospital; Levine voted to approve the application.

According to Levine, he also took steps to cause other Planning Board members to vote to approve Mercy’s application.

On or about April 21, 2004, Levine told Kiferbaum what happened at the Planning Board meeting. Levine said that nobody could have gotten this done but Levine; there was a mutiny with the Board members who did not want to approve Mercy’s application; and nobody really knew that Levine was orchestrating it. Kiferbaum said that he could not thank Levine enough.

Levine said that they were in this together.

Shortly after Mercy’s application was approved, Levine directed Kiferbaum to make the kickback payments relating to Mercy Hospital to Individual 1.

Levine told Kiferbaum he would have a consulting agreement prepared for Kiferbaum Construction Company and Individual 1′s company.

On or about April 29, 2004, Individual 1 sent a sham consulting agreement to Kiferbaum, which provided that Kiferbaum Construction Company would make payments to a company operated by Individual 1, totaling approximately $1,728,000.

This amount included proposed kickback payments relating to Mercy, and payments that Kiferbaum still owed as part of the kickback relating to the CMS addition. This agreement was never signed by Kiferbaum.

Bill Baar’s West Side blog led me to the story of how the Obama Administration is penalizing hospitals it judges to have too high readmission rates, for Medicare patients.

Centegra’s Woodstock Hospital

Fox News explains, “Starting in October, Medicare will reduce reimbursements to hospitals with high 30-day readmission rates — which refers to patients who return within a month — by as much as 1 percent. The maximum penalty increases to 2 percent the following year and 3 percent in 2014.”

The Fox News article quotes a doctor as saying, “The readmission measures are risk-adjusted measures.”

Hospitals McHenry County patients use most are listed below

• Centegra Health System – Woodstock Hospital, Woodstock 1.00%
• Centegra Health System – McHenry Hospital, McHenry 1.00%
• Swedish American Hospital, Rockford 0.64%
• Sherman Hospital, Elgin 0.61%
• Advocate Good Shepherd Hospital, Barrington 0.48%
• Provena – Saint Joseph Hospital, Elgin, 0.27%
• Rockford Memorial Hospital, Rockford 0.26%
• Saint Anthony Medical Center, Rockford 0.04%

Sherman Hospital on Randall Road.

When visiting a patient at Sherman Hospital this summer, one of the employees revealed that messages had been sent to employees that the hospital was in negotiations with Advocate Health System for a possible merger or other financial cooperation.

As Crain’s Chicago Business reported, Advocate has a healthy balance sheet, while Sherman, having just built a new hospital, was having some problems.

“Moody’s Investors Service said its cash position and ability to make bond payments was ‘exceptionally weak.’” according to Crain’s.

Within the Crain’s article is this sentence, which I suspect that McHenry County readers will find of interest:

“Sherman and McHenry-based Centegra Health System broke off merger talks earlier this year.”

It would seem to me that Centegra’s Huntley hospital would compete with Sherman.

Back in the late 1960′s when I was McHenry County Treasurer, there was a public hospital in Harvard. I collected taxes for it.

The following from the Harvard Hospital Foundation explains that it became privately owned in 1998.

In 1999, a group of area citizens formed the Harvard Hospital Foundation, a non-profit organization independent from Harvard Memorial Hospital but organized to support the services of the Hospital.

The inspiration to form the Foundation came from a gift to the Hospital of more than $350,000 from the estate of Roland Lemker. Thanks to Rollie’s generosity, the Foundation was created to manage charitable giving to the Hospital through donations, wills, and planned giving… gifts that expand and enhance local health care services. To this end, the Harvard Hospital Foundation is dedicated to raising funds in a consistent and organized manner. This need becomes more critical every year as the economics of health care rapidly change.

Mercy Harvard Hospital, as Harvard Memorial Hospital is now known, is a nonprofit service organization and a partner of the Mercy Health System. It is governed by a community Board of Directors. It has not been a district hospital since 1998 and receives no tax dollars for support. HMH’s only income is derived from operations and donations.

The reason for the contact was to let those on Mercy’s email list know there are still vacancies for the Sept. 30th golf outing at Plum Tree National Golf Course. The 2011 Golf Scramble has a shortgun start at 12:30 with dinner at 5:30. Here’s were to sign up.

McHenry County’s biggest employer is Centegra Health System.

It operates two hospitals as not-for-profit enterprises.

Yesterday, discussions were undoubtedly being held at Centegra and Mercy Health Systems (operators of the Harvard Hospital) concerning the revocation of the property tax exemption for three Illinois hospitals:

• Prentice Women’s Hospital (part of the Northwestern Memorial complex),
• Edwards Hospital (whose president blew the whistle on Stuart Levine when he tried to shake down her institution in return for an expansion in Will County) and
• Decatur Memorial Hospital

Looking at “charity care,” based on an Illinois Supreme Court decision regarding the stripping of real estate tax exempt status of Urbana’s Provena Covenant Medical Center.

The Champaign County hospital now pays $1.2 million to local tax districts.

The Macon County Board of (Assessment) Review had assessed the Decatur hospital.

As far as I know, there is no immediate threat to Centegra’s two hospitals.

I thought CBS Channel Two had the best coverage of the Rod Blagojevich verdict reading.

An employee was texting from the courtroom.

This is how CBS Channel Two told viewers the guilty findings on Counts 12, 13 and 14.

Viewers could see in real time what the talking heads saw.

In covering the Health Facilities Planning Board meeting in Joliet, the Northwest Herald had a camera, which I didn’t dip into (a case of too much information for me), and a series of notes from a reporter on the scene.

First, Mercy’s Crystal Lake application went down with only one vote in favor, the paper reported.

Although the web site reported that Centegra’s Huntley hospital application was also rejected, no vote was given. Guess readers will have to wait until tomorrow to find out.

Or one could go to the Daily Herald story and find the vote was the same 8-1.

I probably should have gone out on a limb and predicted that both applications would be rejected.

There were a bunch of new members who knew little of the process. And the staff had recommended rejection of both applications.

I still don’t think there should be a Soviet-style judgment made by state government.  If Centegra and Mercy want to roll the dice on hundreds of millions of dollars of construction, let them.

The free market would decide the winners and losers among the new and older competitors.

A press release from Mercy Health System:

New Crystal Lake Hospital would provide lifeline for McHenry County
High-tech ER will offer access and convenience when seconds count

CRYSTAL LAKE, IL – A new hospital in Crystal Lake would significantly reduce travel times for McHenry County residents in need of emergency medical treatment and provide efficient access to quality healthcare.

A Crystal Lake hospital, proposed for Route 31 and Three Oaks Road, would serve four of the five most populous communities in the county – Crystal Lake, Algonquin, Lake in the Hills and Cary, U.S. Census figures show. Population in those areas has escalated by nearly 20,000 residents from 2000.

“With a hospital in Crystal Lake, local ambulance run times will be cut in half,” said Mercy Vice President Rich Gruber, noting that the proposed hospital plan is “wholeheartedly” endorsed by the Crystal Lake Fire Department. “That saves time so crews can get back into the field and continue to serve the community. Most importantly, reducing run time saves patients precious time when seconds count.”

Mercy Health System submitted plans to state health officials last year to build a $200 million, 353-square-foot, state-of-the-art hospital in Crystal Lake, a project that would begin later this year if approved.

According to Gruber, building a hospital where the most people live only makes sense, especially in emergency situations. Currently, the closest facilities for residents in those four areas are located in Woodstock, McHenry or Barrington.

Visits to emergency rooms, which serve as gateways for treatment and admissions for inpatient care or points of transfer, have increased dramatically throughout the nation in recent years. It’s now more crucial than ever that hospitals focus on delivering timely, exceptional healthcare and ensure patients receive the care they need without lengthy wait times.

“Increased drive times to area hospitals and the subsequent wait times and emergency room overcrowding are unacceptable,” said Dr. Dean Wolanyk who specializes in emergency medicine at Mercy’s Harvard Hospital. “These are factors that diminish the quality of the healthcare patients receive and force them to endure more suffering with potentially tragic consequences. With a Crystal Lake hospital, we are committed to bringing immediate access to quality health care when patients need it most and require the greatest amount of care.”

Mercy’s state-of-the-art emergency room is designed and staffed to attend to patients quickly and efficiently while providing them the comfort, emotional support and information they need. The new amenities and electronic records system will make for an expedited intake process, reducing wait times and enabling patients to see a doctor and receive necessary treatment much faster than traditional emergency rooms.

Emergency-room visits have increased at a rate of twice the population growth, according to the American College of Emergency Physicians. This figure is only expected to increase as the number of uninsured and new Medicaid recipients continue to rise.

According to Press Ganey, which tracks hospital performance nationwide, the average emergency room wait time in 2009 was four hours and seven minutes. Emergency wait times have a direct impact on patient satisfaction, Press Ganey concluded.

That’s why it’s more important than ever that emergency departments have the latest technology and systems in place to better treat large volumes of patients suffering from a myriad of medical issues, Gruber added.

“The last thing anyone who is sick or suffering from an extreme medical condition wants to do is wait to see a doctor,” Gruber said, noting that some other local hospitals have begun posting their wait times online. “Unfortunately, for any patient and their loved ones, a trip to the emergency room is a long and frustrating wait that couldn’t come at a worse time.”

The emergency room will feature 10 beds. It will also include treatment rooms focused on critical care, trauma injuries and heart-related stress.

“When seconds count, families and seniors living in the most highly populated areas obviously have the greatest need and require the most care,” Gruber said.

“They deserve a centralized, accessible facility that provides quality healthcare. A new hospital in Crystal Lake would meet and exceed the growing demand that shows no signs of slowing down.”

Standing in the Crystal Lake City Council Chambers, where he presides as Mayor at Tuesday night meetings, Aaron Shepley put on his other hat to represent Centegra, his day-time employer, in its opposition have competitor Mercy Health System be given state permission to build a hospital in Crystal Lake at Route 31 and Three Oaks Road (across from the Holiday Inn).

The first page of transcript you see below has former Crystal Lake City Councilman Fred Wickham finishing his testimony in favor of Mercy’s building a Crystal Lake hospital. Shepley’s testimony starts on the second page.

A press release from Mercy Health Systems:

Census data shows Crystal Lake hospital is needed now

Centegra plan must wait years until population grows

According to recent data released by the U.S. Census, increased residential growth in the most densely populated area in McHenry County demonstrates a significant need for a hospital to be built in Crystal Lake.

Meanwhile, a new hospital in Huntley would have to wait until the population there increases, census data confirms.

The 2010 figures released a few weeks ago shows that four of the five most populous communities in the county – Crystal Lake, Algonquin, Lake in the Hills and Cary escalated by a total of nearly 20,000 residents from 2000 for a combined total of nearly 125,000 people. A Crystal Lake Hospital would serve each of those communities, none of which currently has a hospital. The municipality with the fourth highest population in the county – McHenry – already has a hospital.

Mercy Health System has submitted a plan to state health officials to build a $200 million, 353-square-foot, state-of-the-art hospital in Crystal Lake, a project that would begin later this year.

According to Mercy Vice President Rich Gruber, building a hospital where the most people live only makes sense. Currently, the closest facilities for residents in those four areas are located in Woodstock, McHenry or Barrington.

“Families, women and seniors living in the most highly populated areas obviously have the greatest need and require the most care,” Gruber said. “They deserve a centralized, accessible facility that provides quality healthcare. A new hospital in Crystal Lake would meet the growing demand that shows no signs of slowing down.”

If its application wins approval, Mercy would break ground on a new hospital in Crystal Lake later this year.

Meanwhile, a competing bid from Centegra Health System would require the population in the southwest section of the county to grow in order to create a need before building begins. Even if approved by state regulators this year, Centegra’s planned facility in Huntley would not even open until 2016.

A Crystal Lake hospital would bring sorely needed jobs and spur economic growth beginning in 2011, Gruber added.

Pamphlet promoting Mercy's Crystal Lake hospital proposal.

“Not only do people need quality healthcare options where they live now, but we also need to create jobs for McHenry County and spur economic development to strengthen the financial well being of the area and the families who live here,” Gruber said.

One Lake in the Hills mother echoed the sentiments of many area families when she submitted comment to the Illinois Health Facilities and Services Review Board in favor of a new hospital in Crystal Lake: “I have three kids and it would be great to have a hospital closer to where we live.”

Gruber noted that the rapid population growth also impacts development, which effects traffic congestion and ultimately increases the time emergency responders take to travel between accident scenes and the nearest emergency centers.

Building the hospital in Crystal Lake would significantly reduce travel time for EMS personal.

“In emergency situations, seconds count,” Gruber said. “Patients who require medical care and have sustained serious injuries can ill afford to suffer further with long wait times and delays in receiving quality healthcare.”

“It takes me 30 minutes or more to get to Woodstock or McHenry and it would be nice to have an ER closer with quality healthcare,” said Donald of Crystal Lake who wrote in support of a new Crystal Lake hospital to state health officials.

A press release from Mercy Health System:

Local Business Leaders Support Crystal Lake Hospital Plan

Two groups unanimously back $200 million proposal, job creation

Mercy Health System recently received the backing of two influential business groups that support the building of a new state-of-the-art hospital in Crystal Lake that will create jobs and spur economic growth.

The Crystal Lake Chamber of Commerce voted to approve a resolution backing the new $200 million, 128-bed acute-care facility at Route 31 and Three Oaks Road. The Crystal Lake Economic Development Committee also approved a similar resolution supporting Mercy’s efforts.

“We’ve listened to the needs of the entire community – including those of local and small business leaders – and put forth a proposal that not only delivers quality healthcare, but will create jobs and encourage economic development starting this year,” said Richard Gruber, Vice President at Mercy Health System.

“With the state’s unemployment rate over 9 percent – including 8.4 percent here in McHenry County – the sobering fact is that Illinois needs more jobs, and we need them now.”

Chairman of the Crystal Lake Chamber of Commerce Brian Coli and the Board of Directors sent a letter of support this week to the Illinois Health Facilities and Services Review Board supporting the Crystal Lake proposal.

Rendering of the proposed Mercy's Crystal Lake hospital.

Gruber added the plan would create approximately 800 construction-related jobs beginning this year. Once the facility opens, it would employ up to 850 full-time hospital jobs and approximately 200 part-time positions.

Given that these difficult economic times caused by the recession have led to many local businesses closing their doors, Gruber believes the new Crystal Lake hospital would provide a boost to the local economy. Mercy officials project that a Crystal Lake hospital would generate industry sales of $103 million in its first year and up to more than $257 million annually after five years.

“Every new job created has a ripple effect in the Crystal Lake and McHenry County and on the region’s overall financial health,” Gruber said. “Job creation leads to new workers earning wages, spending money, purchasing homes, and raising families – all of which strengthen communities.”

Gruber noted that Mercy shares the chamber’s mission and belief “that a positive business climate is an integral part of a healthy community.” For more than 70 years, the Crystal Lake Chamber of Commerce has been dedicated to promoting local businesses and helping make the community one of McHenry County’s premier places to work, live and play. Its Board has 21 members: 15 regular Directors and six at-large Directors.

Crystal Lake’s Economic Development Committee, comprised of nine volunteer members who are appointed by the Mayor and approved by the City Council, recommends ways to expand and retain local businesses and to promote development opportunities.

“Mercy is honored to have the support of these two respected organizations and we’re committed to working with them to encourage job creation, business growth and economic opportunities for the entire community,” Gruber said.

In the last few weeks, the Crystal Lake hospital proposal received the endorsement of the Crystal Lake City Council, the Village of Cary and the McHenry County Board.

Anyone wanting to learn more about the proposal is invited to attend public hearing that will take place at 10 a.m., March 18, at Crystal Lake City Hall, 100 W Woodstock St., Crystal Lake.

The public is also invited to submit written comments in support of the proposal to the Illinois Health Facilities and Services Review Board by 9 a.m. on April 20. The Board is expected to make a determination on the proposal in May.

For more information about the Mercy plan, visit www.MercyCrystalLake.org