A limited scope documentary about Chicago's Michael Reese Hospital
By Arlen Parsa
The Michael Reese Hospital has a long and impressive past, beginning in 1881 when it was originally founded as Chicago's second hospital. More recently however, the hospital has come across hard times. The timeline below recounts major events in the past several years leading to the hospital's closure.
1991 - Humana Inc, a health insurance corporation buys Michael Reese from the Jewish foundation that had managed it for its HMO. Reese employees are told they will be "humana-tized" and resentment builds as the hospital becomes a for-profit institution for the first time in its history. Reese at this time had 1,008 beds and its health plan had 240,000 members. It is the first hospital Kentucky-based Humana has ever bought in Chicago.
1993, March - Humana Inc sells off Reese and 75 other hospitals to a new company called Galen Health Care Inc in order to focus on the HMO side of things. Galen's stock goes up 12.5 cents on the news. Galen is based in Kentucky.
1993, June - Galen merges with a company called Columbia Hospital Corporation, based in Texas. A major shareholder heralds the news, saying "the combination of Columbia and Galen creates one of the nation's largest healthcare providers and one that is uniquely positioned to prosper in today's dynamic healthcare system." Columbia brags that Chicago will become its most profitable region.
1993, October - Columbia Corporation, the new owner of Reese, merges with a corporation called HCA-Hospital Corp. A news report at the time proclaims that "The future of medical care has arrived." The new company will be based in Tennessee.
1996 - A news report cites Columbia/HCA executives as grumbling about how "Reese fell almost $4.3 million short of company-set patient-revenue targets of $123.5 million." Meanwhile, the company comes under federal investigation for fraudulent billing practices (they will later plead guilty to a slew of corruption and fraud charges).
1998 - With Columbia/HCA faltering under what has become the largest ever federal investigation of a health care corporation and in need of cash fast, Reese is bought by an Arizona-based for-profit called Doctor's Community Healthcare Corporation. Reese has by now been downsized to only 523 beds, reflecting a broader nationwide trend towards more out-patient treatment.
2001 - Under pressure from its creditors who have loaned it millions, executives for Doctor's Community Healthcare Corporation bluntly outline their business model to a reporter: "We've been investing in poor hospitals in poor neighborhoods... in the long term, this can be an ongoing, profitable enterprise." Michael Reese is cited as an example of how this model will work.
2002 - The model does not work. Doctor's Community Healthcare Corporation files for Chapter 11 bankruptcy protection. Additionally, one DCHC's own owners, who in a complicated financial manuever had been providing Michael Reese with an allowance to pay employees and vendors, is raided by the FBI for allegedly cooking its own books (the Ohio-based company later plead guilty of conspiring to defaud investors of $3.35 billion in fake securities). With its latest owners under federal investigation, Reese begins paying employees out of pocket.
2003 - Eager to make some fast cash to stay afloat, Doctor's Community sells the land Michael Reese has been on for 123 years to a hospital supply company called Medline for $24 million. The hospital will continue to occupy the land under a lease. "It's a great site at a cheap price," one observer comments.
2007 - It is suggested that a prospective Olympic Village could be built on the Michael Reese Hospital site for Chicago's 2016 Olympics bid. If the games go to another city, the land will be sold to a private company, likely to build condos on. Alderman Toni Preckwinkle, whose ward includes the hospital, discourages the city from pursuing a route of seizing the hospital using the power of eminent domain.
2008, February - A news report suggests that Reese's CEO has told administrators that the city wants the land the hospital sits upon one way or another.
2008, September - Alderman Preckwinkle is quoted as saying, "Condemn the property. Use the city's power of eminent domain. We should pursue the property with whatever means are at our disposal. ... I'm going to encourage the city to do that."
2008, December - The Chicago City Council votes 47-0 to borrow $86 million to buy the Michael Reese Hospital site from Medline.
2009, April - The City of Chicago asks demolition companies to submit bids to see who can demolish the hospital in the cheapest way possible.