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Accretive Got TIF Funds

The hugely profitable Chicago health-care debt collection company under fire for its (allegedly) unsavory practices - led by a devotee of Ayn Rand and Milton Friedman - has also been a recipient of generous taxpayer subsidies including millions of dollars in TIF funds.

"The City of Chicago has approved a $6 million subsidy to a company promising to create 650 jobs over the next 10 years," Fox Chicago News reported in 2010.

"The money will be going to the Accretive Health Company, which manages the collection of medical bills. The money will provide the company with tax breaks and other incentives to expand the offices it already has on Michigan Avenue."

Last year the company reported $29 million in profits.

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The state has also been generous toward Accretive.

"Governor Pat Quinn today announced that the state is providing a more than $1.4 million business investment package to assist Accretive Health, Inc. in opening a new facility in Chicago, as opposed to Florida or Tennessee," his office announced in November 2010."

That was a big year for Tolan; among other things, she was named Ernst & Young's Entrepreneur of the Year in the services category.

But the attorney general of Minnesota isn't very impressed.

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Here in Chicago, Accretive has juice. Accretive was one of 12 corporations whom World Business Chicago recommended for subsidies between 2005 to 2010, according to city inspector general Joe Ferguson.

WBC, now the economic development arm of the Emanuel's increasingly privatized administration, calls Accretive one of its success stories.

"Chicago-based Accretive Health Inc. is growing exponentially by doing something that seems very simple: making it easier for healthcare facilities do what they're meant to do - provide healthcare," WBC says on its website. "Accretive helps simplify the management of hospital's and doctor's accounting and billing operations.

"Because this is what Accretive workers are specifically trained to do, that bookkeeping can be done more efficiently than a healthcare facility may be able to execute internally. Increased efficiency means cost savings and, thanks to a creative payment structure, it is through these savings that Accretive is paid. The hospital or doctor's office pays Accretive half of its total savings - it's a true win-win."

For such a Rand devotee, CEO Mary Tolan sure likes government. Not only does she accept subsidies by the millions, but she likes it to train its workers.

"To get the workforce that the company needs, Accretive has partnered with Chicago Career Tech (CCT) to train the skilled customer service representatives required to handle medical billing and insurance questions that clients may have," WBC also notes.

"CCT is the brainchild of former Mayor Richard M. Daley and was developed and incubated by World Business Chicago in late 2009. It is the first program of its kind in the country and provides an intense six-month, six-day-a-week program in technology-based job retraining designed exclusively for low- and middle-income, unemployed Chicago residents. The integrated program features classroom training plus hands-on employer- and service-based learning with a business or nonprofit organization.

"For the past year, Accretive has been one of those employer-based learning partners and has hired a large number of these newly re-trained workers. It's another win-win that WBC was happy to facilitate: find a way for Chicagoans looking for work to partner with a fast-growing Chicago company looking to hire qualified employees. In fact, the company expects to hire more than 650 people over the next several years."

CCT is funded in part by the city and state. Accretive "has become the largest career partner that CCT has and currently employs 25 CCT grads," WBC says. "These positions are a far cry from entry level - the average staring salary is $35,506. In CCT's current class Accretive Health is helping to train 49 of the participants."

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Accretive filed a motion on Monday to dismiss the case against it in Minnesota and issued a statement, but otherwise, as the Tribune notes, as been silent; company executives have refused to comment even as one of its now-former clients has apologized to patients.

(Crain's reports that it conducted "a brief interview" with Tolan last Thursday, which seems to have amounted to just this quote: "I think that our growth going forward is going to continue to be a function of the good work that we're doing with our customers, who are really very supportive of us. That is what's going to carry the day, not this current media blitz.")

The company is also getting heat from at least a couple of federal lawmakers, including Al Franken.

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In another interesting development:

"Two Fairview [hospital] executives who helped forge a partnership with a debt collection company under fire for its aggressive tactics have sons who work for the firm, the Star Tribune has learned.

"One of the Fairview officials, Dr. Dave Moen, also owned stock in the collection firm, Accretive Health Inc. His son, 24-year-old Sam Moen, works for Accretive and helped implement the high-pressure strategies that Minnesota Attorney General Lori Swanson blasted this week, documents show. Fairview's CEO, Mark Eustis, also has a son who works for Accretive."

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Another unsavory connection.

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How Accretive allegedly operates.

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The University of Chicago is proud.

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See also the item "Bedside Manners".

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Comments welcome.



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Posted on May 1, 2012


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