Howard Brown Health Center ( HBHC ) hosted a press conference Nov. 4. The purpose was to provide an update on the organization's financial health following more than a year of turmoil, and its plans for the future regarding patient care in light of healthcare reform.
As Windy City Times reported, HBHC has been struggling with financial issues since last year, when alleged financial mismanagement resulted in the loss of the prestigious MACS ( Multicenter AIDS Cohort Study ) and other funding losses.
On Nov. 4, CEO Jamal Edwards began the press conference by updating the small audience on Howard Brown's financial situation.
He noted that a year ago, the institution had to make a difficult announcement about its economic status but "we appealed to the community for help and we exceeded half a million [ dollars ] in 50 days. We raised the necessary funds to continue our research and health services, in total $1,250,000. However, we are still burdened with the challenges of the past."
He said that the organization was now "completing our financial audit on time for the first time because we are now closely monitoring every aspect of the institution. We managed a significant turnaround in a year that included an investigation by the Office of the Inspector General ( OIG ) ." OIG is part of the U.S. Department of Health & Human Services.
Edwards then proceeded to give, with the help of a PowerPoint presentation, a timeline of events of the past year and the current fiscal situation at HBHC.
According to Edwards, the OIG concluded its investigation in August and will not be disbarring HBHC. HBHC is "in the midst of settlement discussions to resolve the financial aspects of the liability" stemming from the funding problems related to the MACS grant.
Edwards said that the OIG's findings include mismanagement that occurred over the course of five years, from 2005-2010. In the OIG's words, the organization had "accumulated unnecessary debt" and showed a lack of "internal controls." There were "improper advance drawdowns," "delayed payment to subcontractors" and a "failure to manage and rectify known [ problems ] ." ( The last brackets are from HBHC. ) The OIG also concluded that there was a " [ s ] erious breach of fiduciary duty. "
As a result, HBHC now owes the federal government $1.1 million and Northwestern University $1.7 million, for a total of $2.8 million. This is exclusive of any penalties and interest.
According to Edwards, other problems included accumulated unnecessary debt; default on bank debts; lack of clinical oversight; an inadequately trained management team; improper donor and pledge management; and insufficient health benefits and compensation.
With regard to the donor pledges, he said, "We had several instances of improper donor and pledge management, of our prior administration booking large amounts where the donor never paid and have yet to pay them."
About healthcare for staff, he said, "I take this very seriously. Our staff has inadequate health benefits ... far from what they deserve, some 50 percent less than the market rate."
Edwards emphasized that these problems were "symptoms of a more serious problem." He said: "When I arrived in June 2010, we had already accumulated several instances of unnecessary debt including a mortgage on this building, built in 1997 based on a capital campaign for $3.5 million; it is now mortgaged to the tune of $1.9 million. There was a revolving line of credit, which we were in default on as well as in default on our mortgage. Since then, we secured the bank's agreement to forebear on those defaults three times since I've been here."
He said he was working positively with Harris Bank "to avoid any negative action as a result of that debt."
According to Edwards, there were also issues with leases and contracts, particularly in the Brown Elephant stores, because HBHC is "paying above-market rates for the space we occupy and we're being burned by tax obligations that traditionally a not-for-profit wouldn't be burdened by."
There was apparently also a "lack of clinical oversight" that caused HBHC to "part ways with some of our providers in order to meet the standard of care and safety and ethical obligations."
Edwards pointed to what he also said were problems with the management team, saying, "We have a number of people who were here and who are still here, who are very committed to our mission, bright and talented folk, but they weren't invested in it, they weren't trained the way they should have been trained and they weren't as equipped as they could have been to deal with the leadership of this agency and I think that's a failure of our prior administration."
In sum, the organization, after its Lifeline appeal and fundraising and restructuring is now, according to Edwards, seeing a significant turnaround. He praised the staff who, he said, had sacrificed their time and their compensation to achieve this result. However, he noted, "The sad thing is that this fiscal year we're budgeting to have a surplus of over a million dollars but the majority will be allocated to repay debt and not to our staff and our mission, which is something I'm not happy about."
Edwards then turned to the healthcare reform changes slated to come into effect in 2014 with the Affordable Care Act and what he described as its positive effects on LGBTs in particular.
While healthcare reform for heterosexuals means an expansion of services, it actually means the creation of the same for LGBTs, according to Edwards. He noted that there were 350,000 LGBT people in Illinois, with 22,000 HIV-positive people in Chicago, with HBHC helping to care for 10 percent of them.
He pointed out that 1 in 4 LGBTs is without insurance and less than 27 percent of LGBTQ youth are without insurance, while nearly half of transgender people have no access to public or private health insurance. Nearly 65 percent of HBHC patients are uninsured and not eligible for Medicaid or Medicare, according to Edwards.
However, Edwards said, healthcare reform will provide Medicare for those over 65, with no out-of-pocket cost for preventative services ( including wellness visits, HIV screening, smoking cessation, cancer screening, etc. which are being created for our community, according to him ) .
Edwards also said that because of the expansion of the Ryan White Care Act, which now directs more resources for women and children and not just men who have sex with men ( MSMs ) , more HIV patients will be directed into primary care settings, including Federally Qualified Health Centers like HBHC ( which is an FQHC Look Alike ) and others.
Edwards said that all this "creates opportunities for HBHC. We are determined to find new networks." This, he said, would mean making collaborations and partnerships with other organizations. He did not provide details on what these collaborations would look like.
He added, "We're going to look at how we serve our youth." Mentioning those served by Broadway Youth Center ( BYC ) , he said, "Wouldn't it be a wonderful opportunity for us and for them if we could serve them in their communities?"
However, although he briefly mentioned BYC, Edwards did not, during the conference, go into detail about a fact that was mentioned in the press release provided afterwards: BYC will be relocating from its space at Lakeview, at 3719 N. Broadway.
The press release states, "As part of its effort to develop a more robust service network for underserved populations such as the city's youth, HBHC said it will be changing the location of its Broadway Youth Center ( BYC ) , which caters specifically to LGBT youth. Acknowledging that BYC's current location is no longer a sustainable option due to lease issues, HBHC is exploring ways to bring services to youth in their neighborhoods."
The press release went on to quote Edwards: "It's important to be near the youth we serve and where they feel comfortable" and also quoted him saying "New, collaborative partnerships will help us deliver HBHC services to them in their neighborhoods."
However, many of the youth who seek BYC's services are, in fact, homeless or come to the Lakeview area because they do not find resources in their neighborhoods. It is unclear how HBHC might deliver services to those who might be homeless and who come to the North Side for services.
WCT has sent inquiries about this matter. A quick and initial response stated that " [ the ] landlord is not renewing the lease." We have been promised further details as this goes to print, and will be following up on this story.
WCT has previously noted that HBHC recently lost funding for transfeminine youth when the U.S. Centers for Disease Control decided not to refund its TWISTA ( TransWomen Informing Sister TransWomen on AIDS ) program. In addition, HBHC's TYRA ( Trans Youth and Resource Advocacy ) program is up for renewal this year; if that is not funded, HBHC will effectively no longer have any specific programming for transgender youth.
That story prompted HBHC to ban WCT from its premises and stores, with a statement that HBHC will continue to "offer many trans-specific services" and that the TYRA program is "not in jeopardy."
However, WCT was specifically reporting on trans youth services, not trans services in general, and the publication never said that TYRA is in "jeopardy," but threatened if it was not renewed.
Those facts are still true and are highlighted even more if, indeed, BYC should have to relocate. No details were given about where it might move, and WCT will be following up on the implications of this possible move for LGBTQ youth in the city.
( A more recent and conflicting report indicates that the landlord for the space may in fact have signed the lease for another year. WCT will provide updates and clarifications as they become available. )
In light of the statement by Edwards about employee healthcare, WCT also asked at the press conference about recent reports that Brown Elephant store employees had recently seen their hours cut, therefore losing their healthcare.
Edwards responded, "That's not correct. Brown Elephant employees are still receiving healthcare. We have had to make some changes in the staffing pattern of the Brown Elephant stores; we had a number of full-time employees at management level and supervisor levels. We do not have as many full-time employees any more at the sales associate level. That's unfortunate. Again, that's not a problem that I created; that's what we inherited and we're trying to fix. The fact that we can't provide insurance to all of our [ employees ] right now is not something that I'm proud of. That's something I'm determined to turn around, we can't do that without getting our finances in order."
Asked for clarification, he continued, "We have not terminated any employees at the Brown Elephant. We have reclassified our sales associate positions to part-time positions. At the same time, we've created management positions where they are getting benefits but part-time employees are not entitled to benefits."
WCT is also pursuing details of this issue along with a fuller examination of the financial details provided so far to see where they fit into the larger and ongoing story about HBHC.