Urbana critics wary of proposed Carle merger

URBANA – Urbana Mayor Laurel Prussing said she can't fully support a proposed merger of Carle Foundation Hospital and Carle Clinic until she's certain it won't heap an unfair burden on local taxpayers. And it's not enough for Carle to promise Urbana and other local governments that it will make payments in lieu of taxes on clinic properties that could one day become tax-exempt.

Prussing, along with Champaign Mayor Jerry Schweighart, both said they want to see the details in writing, and sooner rather than later.

"At this point, we must say that it is critical to the citizens of Urbana that we reach an agreement with Carle about potential payments in lieu of taxes before the Illinois Health Facilities and Services Review Board votes on Carle's proposed Certificate of Need," Prussing said. "Only then will we gladly and wholeheartedly endorse this merger."

Prussing and Schweighart were among about two dozen speakers to testify Wednesday morning at a public hearing conducted by the state board in Urbana.

The board is charged with determining whether Carle hospital's proposal to buy the clinic and its subsidiary, Health Alliance Medical Plans, for $250 million is needed.

Carle's proposal would integrate the currently for-profit (and taxable) Carle Clinic system into the hospital's not-for-profit organization, potentially stripping a chunk of Carle Clinic properties from the local tax base down the road.

Schweighart said Carle has been a great community partner, but "as mayor for the city of Champaign, I have to tell you, I am concerned about taxes."

Champaign taxing districts, among them the city, received $360,308 from Carle properties this year.

The financial effect of the merger would be enormous for Urbana, where the schools, parks, city government and other taxing districts shared $4.6 million in property-tax payments from Carle Clinic, the Carle hospital and the Carle Foundation this year.

Carle Foundation Hospital is challenging taxes on a handful of properties it contends deserve to be exempt based on the level of charity care the hospital gives to needy patients, but it currently pays taxes without objection on properties leased by the clinic. The concern for local taxing districts is that a merged Carle organization under a nonprofit umbrella could one day mean all Carle properties would be tax-exempt.

Carle officials said the merger would a create a seamless health care delivery system for patients and significantly widen access to medical care in the local area. Under the merger, the clinic system would begin offering the hospital's charity care assistance, opening the door for more patients currently unable to pay for their care to see doctors at Carle Clinic.

Dr. James Leonard, CEO of the hospital, said the integration takes into account not only how the world is now but the world that's on the way, in which "significant transformation is coming in the delivery and financing of health care."

"At the end of the day, this integration is all about a new Carle that will be well-positioned for delivering the highest-quality care possible in the future," he said.

Dr. Bruce Wellman, the clinic's chief executive, said the merger would allow a teamwork approach and a transparency of medical information that would set the stage for the very best patient outcomes.

Claudia Lennhoff, executive director of Champaign County Health Care Consumers, said her organization supports the merger, but wants assurance that the hospital's charitable policies and practices will guide the merged organization and other concerns will be addressed.

The hospital's charity care policies and practices are among the best in the nation and could easily serve as a national model, she said, but her organization's consumer hotline gets 400 calls a month, many from people who can't access care at Carle Clinic.

Lennhoff also said she wants some assurance that those patients who have been banned from access to Carle Clinic will have a new chance to apply for financial assistance and see clinic doctors, and that the collaboration between patient advocates and Carle will continue into the future.

And, Lennhoff said, she wants assurance that the clinic will accept all forms of insurance now accepted by the hospital. The clinic's failure to resolve differences with Blue Cross Blue Shield of Illinois has been a significant problem for people who have Blue Cross Blue Shield insurance, which isn't accepted by Carle Clinic, she said.

Among other supporters for the Carle merger were executives of Frances Nelson Health Center, University of Illinois Medical School, the Champaign County Christian Health Center, United Way of Champaign County and Parkland College.

UI Professor Emeritus Stephen Kaufman posed some questions to Carle, among them how the hospital is going to pay off its debt for the purchase of Carle Clinic. He also asked for details of the cost savings Carle executives see resulting from the merger and wondered how doctor compensation under the merged organization would affect doctors' future time with their patients.

The Health Facilities and Services Review Board will consider the Carle merger proposal in March.

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