In a case that could have national consequences for healthcare providers, Evanston Northwestern Healthcare dodged a bullet on Thursday as the Federal Trade Commission ruled that ENH violated trust laws but would not have to sell its Highland Park Hospital.
The unanimous 5 to 0 decision by the FTC found ENH broke the anti-trust Clayton Act when it acquired Highland Park Hospital in January 2000 and raised cost-of-care rates. Yet the ruling overturned a 2005 order for ENH to divest the Highland Park Hospital. The FTC compromised the previous ruling by requiring ENH to establish "separate and independent negotiating teams" to "re-inject competition" between the hospitals-essentially making the hospitals compete independently for business.
ENH, which also owns Evanston Hospital and Glenview Hospital, said in a press release that it was "thrilled" by the FTC's decision. ENH contended during testimony that its price hikes were necessary because Highland Park Hospital had been underselling for years. Also, the merger improved quality of care at Highland Park resulting in higher demand for the hospital's services.
But the FTC disagreed. In her opinion in the ruling, Deborah Platt Majoras, FTC chairman for this case, said, "[t]here is no dispute that ENH substantially raised its prices shortly after the merging parties consummated the transaction." The merger allowed ENH to leverage unfairly higher rates from insurance companies," she said.
Together, the three hospitals form a triangle in the North Shore serving Evanston, Glencoe, Wilmette, Winnetka, Kenilworth, Highland Park and Lake Forest. There are nine other nearby hospitals but none in the ENH triangle. Combined, the three hospitals have approximately 700 beds and offer primary and secondary care.
The FTC's decision carries weight nationally because as hospitals merge, this case will be viewed as precedent.
"It remains to be seen whether federal court embraces what the FTC ruled," said Chul Pak, an attorney with Wilson Sonsini Goodrich and Rosati in New York, who argued for a full divestiture on behalf of the FTC. He said the FTC ruled against divestiture partly because the hospitals have been together for seven years and because hospitals provide an essential role in the community.
"Time will tell," Pak said of the ruling's effectiveness. "It was not the optimal outcome, but the remedy helps level the bargaining field so insurers can get lower prices. It was certainly the intent [of the FTC] to lower costs."
ENH has 30 days to provide the FTC with a plan to describe how Highland Park Hospital will act independently or appeal the ruling. ENH said no decision has been made about an appeal.
The complaint council's economist, Deborah Haas-Wilson, used data that included all Illinois patients from 1998 through 2002 and found that ENH increased its per day average net prices by 48 percent for all patients. And the FTC also found ENH and Highland Park were well aware of their new bargaining power. The FTC cited in its opinion a report written by Highland Park Hospital President and CEO, Ronald Spaeth, who wrote in 1999 before the merger, "it would be real tough for any of the Fortune 40 companies in this area whose CEOs either use this place [Highland Park] or that place [Evanston and Glenbrook] to walk from Evanston, Highland Park or Glenbrook [hospitals] and 1700 of their doctors."
The initial complaint was issued by the FTC in February 2004 and alleged that following the acquisition, ENH was able to raise its prices charged to health insurers far above price increases of other hospitals as a result of the transaction.
In October 2005, Chief Administrative Law Judge Stephen J. McGuire issued an initial decision and order, ruling in favor of the FTC, and ordering ENH to sell Highland Park within 180 days. According to McGuire's decision, ENH's acquisition of Highland Park resulted in "substantially lessened competition" and higher prices for insurers and healthcare consumers.
David J.P. Fisher is in your business, literally, and he wants to make you a rock star.
As founder of the Evanston-based company, RockStar Consulting, Fisher works to kick-start a client's professional career. People come to him looking for ways to be more successful at their jobs, and Fisher counsels them in ways that therapy and self-help books cannot.
"The definition of insanity," Fisher said, "is doing the same thing over and over again and expecting something different to happen. I act as support and hold [clients] accountable. They bounce ideas off me as they would go to a priest or bartender in the past. Now people go to a coach for support."
The Chicago area is teeming with these "business coaches" who offer training in anything from personal fitness to dissertation practice for doctoral candidates. It is a business that is hard to quantify but profits off the simple happiness, and increased productivity, of its clientele.
Fisher started RockStar Consulting in 2005 with the idea of giving people "their rock star moment."
"The fun of being on stage is just 5 percent of the job," Fisher said. "I help with the other 95 percent."
RockStar consulting offers one-on-one coaching, "tele-coaching" conference-call coaching and seminars for businesses. Fisher said he has about seven to 10 individual clients at any time and generates most of his business by referrals and word of mouth.
But Fisher faces tough competition for clients as he competes with other coaches. The professional coaching field has boomed in recent years and is close to becoming a $1.5 billion industry worldwide. The International Coaching Federation was founded in 1995 and between 1999 and 2006, the number of members in North America surged up 81 percent. Chicago's own chapter, the Chicago Coaching Federation, has about 350 members with a 700-member mailing list.
"People are more interested in their quality of life," said Faith Curtis, President of CCF and her own coaching business, Personal Power Coaching. "They're trying to reach a goal but can't on their own and their old ways have not worked."
Fisher, 30, found his entrepreneurial spirit selling Cutco Cutlery during his junior year of college at Northwestern University. Cutco Cutlery, most famous for its brand of knives, does not sell its products in stores, but through the hands of young salespeople-mostly legions of high school and college students. Fisher became a rock star in his own right with Cutco. He said he earned about $250,000 selling Cutco, to become one of the company's top-10 sellers in the country. He went on to manage the Chicago office for Cutco. At 22, he was "running the show." He organized the office, paid the bills and trained as many as 110 new sellers at a time.
"It taught me how to run a business," Fisher said. "I got experience at 22 that most people don't get until much later in their career."
Being in charge and handling all the struggles and stress that accompany being an entrepreneur made him comfortable running a business, he said. It also gave him experience training people in sales.
"Many people out of college get thrown into sales right out of college," he said. "As the economy becomes more of a service economy, sales becomes more important as a market base. And too many people see 'sales' as a four-letter word."
Fisher described how he helped one client who worked in real estate and was afraid of making cold calls. He met Fisher through an Evanston Chamber of Commerce event and the two developed a program to make cold calls less often.
"We worked to develop partnerships," said Fisher. The networking helped his client search for customers without resorting to strangers. In spite of the recent housing slump, Fisher said his client just had his most successful month ever.
Fisher's clients split evenly among men and women, he said, and range in ages from 23 to their 60s. Fisher could not say how much he charges clients because it varies, but other coaches charge from $350 to $650 a month. Fisher said he wants his services to be a struggle for clients and a stretch financially.
"If they're getting it cheap," he said, "they won't take it seriously."
Therapy, Fisher insists, is not part of the contract. He does extend beyond the scope of business to take a "whole person" approach, incorporating business with personal life. But he does not dwell on the past.
"If kids picked on you in school, great," he said. "Now where do we go from here?"
Fisher is working with two interns from DePaul University to market RockStar. He is publicizing an e-book coming out in August called "The Book of Habits" and he is developing a MySpace page. But business for Fisher grows best when his clients come back happy.
"Talking to clients six months down the line," Fisher said, "when they come back and remember what they learned, that's the best."
Emotions flared during an Evanston zoning meeting Wednesday as residents confronted the city and consultants over proposed zoning changes on the city's West Side.
The zoning committee of the plan commission agreed to continue deliberation on the West Evanston Master Plan, which drew considerable criticism among residents. They questioned the proposed increasing density, zone changes and tax hikes.
"I'm really appalled," said Roberta Hudson who lives at 1941 Dewey St. "The city should be concerned with helping citizens, not developers."
The plan calls for zoning changes on a diagonal strip from Evanston Township High School to the corner of Simpson Street and Green Bay Road. The changes call for rezoning residential areas, increasing density in some areas and decreasing it in others. A large portion of land between Church and Emerson streets that is zoned as I2, meaning light industrial, typically auto-oriented commercial property, will become R4, residential zoning that caps building height at 42 feet. C2 commercial zoning at Simpson and Green Bay will also be rezoned as R4.
City council approved the master plan on May 14. A vote on the zoning changes was supposed to take place at the meeting, but residents got the vote postponed. The meeting will be continued at 6 p.m. on Aug. 22.
Farr Associates, planning consultants hired in August 2006 to make recommendations, presented their findings during the meeting. They relied heavily on residents' suggestions for the plan. Leslie Oberholtzer, director of planning at Farr, said about 40 to 50 people attended each of the planning meetings and made suggestions based on image preference surveys. She said those who did attend were comfortable with the zoning changes.
"It's the same three or four people who [have] objected from Day One," Oberholtzer said of the residents' resistance. "You tend not to hear the positive response from these meetings."
Residents who spoke at the meeting were primarily concerned with increased density in the residential zones. They said the multi-family units, like apartment buildings, increase traffic and pollution. Taxpayers, they said, will be left with the bill for new roads and sewers.
Additionally, residents said they feared new development will raise their property taxes. Betty Ester, of 2114 Darrow St., said the higher taxes will affect elderly residents who live on a fixed income and are hard hit by higher taxes.
"You are changing the footprint of the neighborhood," said Ester who, along with other residents, called for residential zoning to be R3, which limits height to three stories.
"We were promised one thing and something else is on the table," Ester said.
Other residents had specific concerns regarding their business properties. Chip Uchtman owns property on Church Street that is zoned I2. If the zoning changes are made, Uchtman said he would have to sell his property for residential use only. Under the proposed changes, a road would be built through his land, forcing him to give away one-third of his property.
Joe Prudden owns four lots on Green Bay Road including Buffalo Joe's restaurant. This area is set to change from commercial to residential zoning.
"This means we can't expand," Prudden said. "It's part of our retirement."
Prudden and other residents were upset that the city did not notify them about the changes before the meeting. Prudden said he received nothing in the mail about the changes through the city said every taxpayer within 500 feet. of the proposed changes was sent a letter. Residents suggested the city inform them of proposed changes by sending messages through area churches. They also said those who were being affected by the proposal could not attend meetings in the Civic Center; they asked for the meetings to be held in the neighborhood.
After the meeting, Hudson and other residents discussed hiring a lawyer to represent their interests.
"They aren't looking out for the interests of residents," she said of the city. "They're looking out for the best interests of developers."
Paul Barker, an Evanston resident who lives on Oakton Street, said growth has him really worried. "When is it too much?" Baker asked. "The idea of a 50-story building horrifies people. Where along the spectrum do we want to be?"
Such a building was proposed by Evanston developer Robert D. Horner this year. Horner designed a 37-story tower rising 421 feet on the Fountain Square block. Residents were so incensed by the idea that Horner was forced to retract his proposal.
The proposal was only one controversy in Evanston's downtown development plan. Residents have called on the city to rein in unregulated development. They say bigger buildings, which bring more people and traffic, can destroy Evanston's small-town feel. Meanwhile, condominiums and office space mean more tax revenue for a city that is perennially short of funds.
So where does the city find a balance?
The city council commissioned a team of architects and consultants to formulate a plan for Evanston's downtown future. The planning started on June 7 and included a "charrette"-a week long intensive planning session between residents and designers-that concluded last week.
The timing for this plan coincides with a development boom in Evanston. With its trendy shops and restaurants, access to mass transit and suburban tranquility, Evanston has been named "the best market in Chicago" for residential and business space. Eager developers have proposed high-rise developments for downtown. Yet residents have taken the initiative to stave off free-for-all development-even if it costs them.
"This is the democratic process taken to the fullest," said Tom Rath, manager of membership sales and development for the Evanston Chamber of Commerce. "But it can slow down the progress."
The architects who worked with the residents estimated that over 200 participated in the charrette. Some of the residents cautioned against too much expansion.
That philosophy has turned away at least one eager developer. Horner said the strength of the rental market made the building feasible and the increase in tax revenue would have helped shrink Evanston's nearly $100 million pension fund debt. Ultimately, Horner abandoned the project because of delays; he decided to invest elsewhere.
"The general perception is that height is bad, density is bad and additional traffic is bad," Horner said in a phone interview. "There hasn't been a story on the positives."
"People have always been and always will be against change," said Mary Ellen Tainer, managing broker at the Evanston branch of the Rubloff real estate agency. She said people would rather move into new developments than spend the time and money fixing up existing homes. By discouraging developments Evanston residents are hurting themselves, Tainer said. But this does not detract from Evanston's overall appeal, she added.
"Evanston's housing market is stronger than it's ever been," Tainer said. "There's a ton of variety for housing."
But according to the Illinois Association of Realtors, the total number of condos sold in Evanston dropped 25 percent for this quarter (April-June) with a total of 148 condos sold compared to last quarter totals of 197 (January-March). However, individual home sales rose 27 percent.
Horner's development at 1890 Maple Ave. remains on the negotiating table. Designs for this building were presented to city council May 29 but no date has been set for the council's final approval. It has the potential to generate $860,000 annually in tax revenues for the city, developers said.
"There's distrust among people that if government has more money, it will spend more money," Horner said. "Residents don't believe the new tax revenue will offset their sales and property taxes."
The resident-driven planning commission has implications for Horner and other developers. For example, architects suggested a park in place of high-rise condos on the fountain square block. Residents called for the change during the charrette.
"We're not going to compromise what's right for the downtown for a fiscal solution," said Dennis Marino, planning division director, said in a charrette meeting.
Any new buildings proposed by developers must meet the regulations set by residents and architects. And this, Horner said, compels developers to convince residents that development will be good for the city.
"They have to work within the existing process," he said. "They have to work with residents in a way that has a positive message."
Evanston completed its week long charrette Saturday with a presentation by architects that transformed residents' ideas for the downtown area into feasible design plans.
A "charrette" is an intense planning session where citizens and designers collaborate on a vision for development. This charette, which is part of Evanston's first major development planning since 1989, established guidelines for future growth so that unregulated development would not overwhelm the city. City Council commissioned the charrette in May as part of the on-going downtown development plan.
During the week, residents expressed what they would like the downtown district to look and feel like. In a series of breakout sessions and meetings with specific groups of residents, the architects and consultants, who were hired by the city to implement a proposal, heard suggestions about high-rise developments and parking among other concerns.
Kevin Klinkenberg, the head architect with 180° Design Studio who worked with Evanston residents, said they "are an opinionated group," but their participation makes it "easier than when people don't show up."
"They have particular interests and are very responsive," he said.
Residents were invited to drop in to the temporary design studio at 1630-1632 Orrington Ave. to talk with the architects and observe their work. The architects also held meetings with some specific groups-young professionals, new residents, and property owners-to hear what these special interests would like to see downtown. The studio estimated that more than 200 people either attended a meeting or visited during drop-in hours.
"I was expecting a fight but everyone was cooperative," said Paul Barker, an Evanston resident who lives on Oakton Street and attended the Saturday presentation. "The basic feeling of residents is that they don't like the idea of being sold out to developers. This is the opposite. We get to have our say."
One of the first challenges facing residents and architects was defining the actual boundaries for downtown. In the first breakout session held Monday night in the Civic Center, about 80 residents worked in small groups around maps to outline downtown. In the map presented on Saturday, downtown had expanded beyond its traditional boundaries to stretch from Hinman Avenue to Ridge Avenue and Emerson Street to Lake Street.
By Saturday, the architects and associates from Duncan Associates, The Lakota Group, Goodman Williams Group and KLOA, Inc., presented their recommendations in a slideshow. They emphasized that their goals would take 15 to 20 years to fully complete.
The team recommended developing more intimacy and pedestrian viability. Bookman's Alley, off Sherman Avenue, has potential for walk space, but is not successfully used now, Klinkenberg said.
"As cities urbanize, they must utilize the space they have," he said. By turning to the alleys, Klinkenberg said the city could expand without building out or up.
Additionally, converting one-way streets into two-way streets would help slow down traffic and make crossing streets easier. Speed is the main danger for pedestrians and two-way streets actually slow traffic, said Klinkenberg citing Church Street and Davis Street as examples.
As for new construction, the presentation recommended that new buildings be set back from the street to avoid the "canyon effect." Klinkenberg cited the Best Western University Plaza on Sherman Avenue as an example. By setting the building back from the sidewalk, it is less daunting from the street and allows for more light.
No specific height limits for future construction were mentioned, but the planning team said "predictable" rules for construction will benefit both developers and residents. The team is expected to make more definite recommendations on traffic and zoning for the city by early September.
Ald. Lionel Jean-Baptiste, whose 2nd Ward includes part of downtown, said he was pleased with the charrette and that it "attracted a high level of attention."
"When a developer wants to build, we have the where-with-all to see if it's consistent with what's established by the process," he said.
Residents who attended the Saturday morning presentation expressed satisfaction with the recommendations.
Though some residents expressed concern that the expanded downtown would encroach into traditionally residential areas, most said they felt confident with the proposal.
"It's a good plan in that they are talking about balance," said Anne Earle. "There are places for development and there are places to keep."
Danielle Schultz, who said she was born in Evanston and has lived here for 22 years, said the plan will help keep Evanston unique and an attractive place for young people to live.
"This is not Wilmette with its two-point-three kids and a loser cruiser."
The high-pitched siren mercilessly jabbed at the ear drums while the pulsating, high-intensity strobe lights would have penetrated even closed eyes. Clearly, this was no ordinary smoke alarm.
"Most [elderly] people have hearing aids that they use during the day. So this detector would be installed in the sleeping quarters," said Fire Inspector Bob Nelson of the Evanston Fire and Life Safety Services as he demonstrated the smoke alarm for hearing-impaired people.
Nelson successfully lobbied the City of Evanston last year for a Community Development Block Grant to fund 30 smoke alarms made for the hearing-impaired. Low-income Evanstonians ages 60 and above can apply for a free unit by submitting a simple application to Fire and Life Safety Services by Nov. 27.
When the hearing senses are impaired, people will develop a higher sensibility with their other senses, Nelson said. So, even if seniors are sleeping, they will wake up to the intense throbbing of the strobe lights.
To the normal ear, the piercing sound is already, well, alarming. But with seniors in mind, the decibel level with the models, made by the Gentex Corporation, has been kicked up a few notches to 90 dBA. Normal detectors range from 80 to 85 dBA.
In his efforts to educate and protect the public from fire hazards, Nelson has
talked to many seniors.
He came across an article on smoke alarms for the hearing-impaired and through online research, found that 40 percent of seniors are estimated to suffer from some degree of hearing loss.
According to the 2005 U.S. Census Bureau report, there are about 9,000 seniors in Evanston.
That would mean that 3,600 seniors are potentially in need of a special smoke alarm. But as far as Nelson knows, this is the first time this free smoke alarm program has been implemented in Evanston.
Neighboring Skokie used to provide alarms for seniors, but they don't do it anymore, said Fire Inspector Wally Kueking. He said he did not know the reason.
Wilmette does offer regular smoke alarms for free on demand, according to Deputy James Dominic.
Most cities will assist seniors with installing the devices, but they have to provide their own detector.
A regular smoke alarm costs upward of $20. By contrast, the Gentex models that are given out cost a whopping $169.
For many seniors, who live on a limited income, such an expense would place a big strain on their pockets, said Nelson, who is two years away from retirement himself.
Besides the cost factor, these models are hard to come by. "They don't stock them at Home Depot," Nelson said, citing cost factor as a reason for both low demand and supply. However, the special alarms can be bought over the Internet.
Senior citizens applying for the device need a doctor's note indicating that the special smoke alarm would benefit them. There's no technical hearing range requirement, Nelson said.
The Gentex smoke alarm was chosen because of its portability. The alarm can be detached from the wall mount and plugged into another outlet. So when seniors visit their children's homes overnight, they can take the device along, Nelson said.
He also pointed out that besides providing the smoke alarm for free and installing it at the recipient's home, the fire department will walk through the house and perform a safety check. They will look for potential hazards to the elderly " such as a slippery rug " and suggest ways to improve overall safety.
If there is a big demand for the alarms, Nelson said he plans to ask for funding again next year.
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