Cook County Hospital "from the 19th century straight to the 21st": Chicago is home to the nation's oldest public hospital, Cook County Hospital. Once considered Chicago's Ellis Island, the old hospital served countless immigrants, indigents, and uninsured for almost 90 years.(hfm Interview)(Company Profile)

But vines and cracks now invade the strong carvings of lions, cherubs, and humans in the 550-foot neoclassical facade of the shuttered hospital. Trash and debris swirl in the window wells and at the bases of the three-story Ionic columns. Battered office chairs and dusty, grimy floors can be seen through the padlocked doors.

Half a block away stands the new John H. Stroger, Jr., Hospital of Cook County, a gleaming glass and steel architectural showcase. Opened on December 12, 2002, the 464-bed state-of-the-art hospital is a marvel of information technology.

One year ago, Richard C. Powell, CPA, became CFO of Stroger Hospital. He talked with hfm about the special challenges facing public hospitals today, and how an iconic hospital such as "County" is meeting those challenges.

Making up Powell's list of the top five issues facing public hospitals today are: the relentless push to improve patient care while driving down costs; meeting the healthcare needs of the growing numbers of uninsured and the aging; the increasing cost of professional liability insurance and the impact of litigation on care delivery and cost; increasing regulatory pressures; and caregiver labor shortages.

On the push to improve care while driving down costs: Our hospital is funded roughly 70 percent with Medicare/Medicaid funding and 30 percent with Cook County tax dollars. In 1995, that ratio was 50/50. So we've lowered our reliance on Cook County tax dollars and at the same time provided our population with increasing patient care, which is a remarkable feat. Now, the bigger question is, how do we maintain or even increase that 70/30 ratio?

We're taking a private industry approach, constantly evaluating how we do business. Can we squeeze more cost out of our supply chain with respect to the pharmaceuticals, surgical and lab supplies, and so forth? Can we do a better job of negotiating with vendors and getting discounts?

As an example of a private sector approach, we use electronic billing instead of shifting paper from one institution to another. In the case of pharmaceuticals, we allow certain vendors to monitor our inventory level so they know when to trigger orders automatically rather than waiting for us to send them …