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FY2020 Proposed Preliminary Budget andFinancial ForecastDr. Jay Shannon, CEOEkerete Akpan, CFOAugust 30, 2019

Uncompensated Care Bad Debt Charity Care

Uncompensated Care Trends in the USUncompensated care (bad debt charity care) costs increased in 2016, forthe first time since the 2014 expansion of Medicaid. From 2015 to 2016,uncompensated care costs increased by 2.3B (6.4%) from 36.1B to 38.4B.Source: American Hospital Association, Uncompensated Hospital Care Cost Fact Sheet, January 2019.3

Uncompensated CareData from more than 5,000 hospitals throughout the US 50 45 40 35 30 25 20 15 10 5 0112012* Uncompensated Care Bad Debt Charity Care.** 2014 marks the Affordable Care Act Medicaid expansion.Source: American Hospital Association, Uncompensated Hospital Care Cost Fact Sheet, January 2019.201320142015201620174

Bad Debt Is On The Rise Throughout the NationThe hospitals with the most bad debt are part of large safety-net systems in urban areas:1. Parkland Memorial Hospital, Dallas, Texas2. Jackson Memorial Hospital, Miami, Florida3. Grady Memorial Hospital, Atlanta, Georgia4. UF Health Jacksonville, Jacksonville, Florida5. John H. Stroger, Jr. Hospital, Chicago, IllinoisSource: Definitive Healthcare5

Bad Debt Is On The Rise LocallyFeel like the hospital isshaking you down over thatbill? It probably is.By Brigid Sweeney March 24, 2017Even as the number ofAmericans without healthinsurance is at a record low,Chicago hospitals are wrestlingwith a metastasizing problem:bad debt.6

CCH Uncompensated Care*(in 2015FY2016FY2017377409174FY2013FY2014Charity Care CostFY2018 **FY2019 *** FY2020 ****Bad Debt Cost* Uncompensated Care is Charity Care Bad Debt at cost** FY2018 Actual from Audited Financials***FY2019 projected****FY2020 Projected7NOTE: Some numbers are rounded to nearest million for display purposes and could result in small arithmetical

CCH Charity Care at Cost(in millions)500 104M400 409 377 348300200 266 252 281 273 FY2020*Charity Care Cost*Projections based on current trends8

New Model for the UninsuredDirect AccessProgramLaunched in 2017More than 31,000individuals are enrolledin the program;87% with income 200%Federal Poverty Level.Cook County Working On A Managed Health Care Plan ForUninsured ResidentsSeptember 14, 2016Cook County launches new program for the uninsuredSeptember 14, 2016Cook County to start program to help uninsured get health careSeptember 14, 20169

Cost of Direct Access Program (in millions)All costs absorbed by CCHDirect Access Cost25020015010050020162017*20182019**2020**Direct Access Cost* Program started in late 2017.** Projections based on current trends.10

Charity Care in Cook County2013Charity Care(Pre-ACA)2017Charity CareAll Hospitals inCook County 690M 554MStroger andProvident 257M 273MSource: IDPH Hospital Profiles 2013, 201711

FY2019 Accomplishments12

FY2019 Accomplishments 16% increase in primary care visits over FY19 target. Majority of growth due to growth in uninsureddemand. Provision of an additional 30M in charity care over budget. Charity Care has grown by more than 100M in last two years alone. Grew CountyCare to be the largest Medicaid managed care plan in the county. Cook County Health remains the largest provider of care in the CountyCare network. U.S. News and World Report Recognition for heart failure, gastroenterology and neurology atStroger Hospital. Facility modernization milestones achieved with replacement of health center at Arlington Heightswith substantial work done at North Riverside (Cicero clinic replacement) and Blue Island (OakForest Clinic replacement). Broke ground on the new CCH Belmont-Cragin Health Center.13

FY2019 Accomplishments National Commission on Correctional Health Care recertification at JTDC. Distributed more than 4,000 naloxone (Narcan) kits to at-risk individuals upon discharge fromCook County Jail. Awarded more than 9M in extramural funding to support strategic initiatives in correctionalhealth, behavioral health, housing and maternal child health services. Opened Intensive Care Unit at Provident Hospital. Hosted Research and Innovation Summits on opioids and housing. Summit on the JusticeInvolved population scheduled for September 18, 2019. Filed Certificate of Need application with the state of Illinois for the construction of new inpatientand outpatient facility on the Provident campus. Continuation of trauma training partnership with US Navy.14

FY2019 Accomplishments Expansion of Social Determinants of Health initiatives (Housing, Food Insecurity, Opioid-UseDisorders, Justice-Involved). Surpassed the distribution of 500,000 pounds of fresh produce at CCH health centers through ourpartnership with the Greater Chicago Food Depository. CCH achieved full implementation of Health Information Exchange (HIE) between Cerner CommonWelland Epic Carequality allowing CCH providers to access patient information at all clinical and hospitalsconnected to HIE Participated in several workforce development programs aimed at exposing young people to careers inhealthcare. Provided more than 14,000 hours of training to the CCH workforce through 97 classroom sessions and253 online courses. Executed public education and marketing campaigns focused on adolescent health, SexuallyTransmitted Infections, Cook County Health and CountyCare.15

FY2019 Capital Investments Prior to FY2016, Cook County Government provided a separate capital allocation to Cook CountyHealth. In the last four years, Cook County Health has funded millions in overdue capitalequipment out of its operating budget. CCH continues to substantially invest in new facilities, medical equipment and technology toimprove patient safety, quality and experience. In FY2019, CCH has completed procurementprocesses / actual spend for over 74M in cost using lease finance mechanism; Combined spend of capital medical equipment purchases - 56M Information Technology upgrades - 7M Arlington Heights Community Health Center medical equipment /IT Costs - 3M Arlington Heights Community Health Center final construction cost - 5M (includingLandlord contribution of 1M Blue Island and North Riverside Community Health Center construction in progress - 4M16

Operational Realities

Operational Realities Reduced reliance on local taxpayer support. Absorbed growth in Correctional Health & PublicHealth since 2017. Significant growth in demand for Charity Care. Charity care grew by more than 100M since 2017. Salary and benefit increases related to CBAs. Like all health systems, CCH is subject to cost increases in pharmaceutical, equipment andsupplies. Growing patient care revenue has been CCH’s only source to fund continued growth in charity care. Medicaid application processing at the state level. State capitation rates. Competing with national brands and private not-for-profits that have considerable resources. National, state and local politics and policies.18

FY2020 Proposed Budget19

FY 2020 Proposed Budget SummaryThe 2.8B FY2020 budget proposal moves CCH into the first year of the recently approved strategicplan, IMPACT 2023. The FY2020 budget includes: 590M in uncompensated care ( 409M charity care and 181M in bed debt) 6,589 FTEs 326,000 CountyCare Members No layoffs 74M in capital equipment 11M in extramural funding Underlines organizational focus on quality improvements, patient satisfaction andregulatory compliance. Continues efforts to build, realign, and integrate clinical and managed care capacity acrossall care settings. Supports organizational capacity to improve clinical documentation, billing, coding,collections and other revenue cycle activities.20

FY2020 Proposed BudgetRevenue DriversCountyCare membership growth to 326,000. Current membership at 318,000 and trending up sincenew state administration focus on application processing.Initiatives in the following areas expected to drive additional revenues:o Dialysis services at Providento Surgery at Provident and Strogero New larger community health centers in the community at Blue Island and North Riverside withenhanced serviceso Specialist physicians deployed to CCH community health centerso Restoring Provident Ambulance serviceso CountyCare network adjustmentsProfessional and facility billing improvements21

FY2020 Proposed BudgetExpense Drivers 590 M in uncompensated care costs 409M charity care, 181M bad debt Wage and benefits increases, driven by negotiated changes Additional mental health services at the Juvenile Temporary Detention Center Pharmacy, medical supplies and equipment inflation Increased expenses in CountyCare as membership increases Information Technology investments to adapt to industry changes in security and reliability Ongoing investments in new revenue cycle billing system Continued overhead cost of operating Oak Forest campus22

FY 2020 Projected VolumeMonthly AverageVisit TypeMonthlyProjectionDifferenceFY 2018FY 2019*FY 2020FY20 v. FY19Surgical Cases1,2651,2141,3209%Emergency Visits12,54412,36113,1056%Primary Care Visits18,12719,75620,5084%Specialty Care Visits27,59528,58629,6914%8285906%Deliveries*based on first 6 months of FY 2019ED visit growth is driven by Provident ambulance runs23

FY2019-FY2020 Budget (in Millions)FY2019 AdjustedAppropriation*FY2019 ProjectedYear EndFY2020 ProposedRevenues 2,690 2,629 2,824Expenses 2,690 2,629 2,824 0 0 0Net Surplus/(Deficit)*Assumes projected adjustments for CountyCare based on higher than expected membership24

FY2020 Proposed CountyCare Financial Summary(in millions)ACA 26,034 474 542 567 169 1,752712658191733914764901461,502203019574 483 532 466 169 1,751Profit/(Loss)( 4) 4 1 0 1Total CCH Contribution 68 30 57 19 173Projected 2020 MembershipRevenue (in millions)Medical Expense (CCH)Medical Expense (Network)Administrative ExpenseTotal Expenses (in millions)TOTALNOTE: Some numbers are rounded to nearest million for display purposes and could result in small arithmetical differences.ACA – Affordable Care Act, FHP – Family Health Program, SPD – Seniors and Persons with Disabilities , MLTSS – Medicaid andLong Term Services and Supports, LTSS - Long Term Services and Supports, IMD – Institution for Mental Disease25

FY2020 Proposed External Revenue by Source(in millions)16173*5131321571,749Patient FeesBIPADSHCountyCareDSH: Disproportionate Share Hospital PaymentsBIPA: Benefits Improvement and Protection Act Payments* Revenue from CountyCare members served at CCH facilitiesNOTE: Some numbers are rounded to nearest million for display purposes and could result in small arithmeticalOthers26

Cook County Pension, Debt Service & OperatingAllocation (in 19 *FY2020 *Tax Allocation*FY2019PensionNOTE: The CCHFY2020 budgetanticipates a taxallocation of 115M ofwhich 32M will go toCCH current pensions,up 3M from 2019. In2018 and 2019, CCHdirected 29M fromthe tax allocation to thepension. This pensioncontribution effectivelyreduces the amountdirected at operationsto 73M for 2018, 2019and 83 for 2020.Debt Service& FY2020 Projected27NOTE: Some numbers are rounded to nearest million for display purposes and could result in small arithmetical

Operating Tax Allocation as a Percentage of CCH RevenueIn FY2020, the Cook County Tax Allocation will Represent less than 5% of CCH’s Operating Revenue120%Tax AllocationCCH Generated 28

CCH Uncompensated Care*(in millions)154284139157167200140252174FY2 013FY2 014266281273FY2 015FY2 016FY2 017Charity Care Cost181348FY2 018377FY2 019 **409FY2 02 0 **Bad Debt Cost* Uncompensated Care is Charity Care Bad Debt at cost**FY2020 ProjectedNOTE: Some numbers are rounded to nearest million for display purposes and could result in small arithmetical29

CCH Charity Care at Cost(in millions)500 104M400 409 377 348300200 266 252 281 273 1741000FY2013FY2014FY2015FY2016FY2017Charity Care Cost**Projections based on current trends.FY2018FY2019*FY2020*30

System Payor Mix By Visit as of June 20192%Medicare16%UncompensatedCare 44%6%21%CountyCare16%17%12%All Medicaid 33%5% 5%31