St. Luke’s and Children’s Mercy have a lot of money in different places

As The Pitch has covered before, many if not all of the big checks funding the campaign for the passage of the translational medical research sales tax come from interests closely aligned with the institutions that will benefit from a half-cent sales-tax increase or the Civic Council of Greater Kansas City.

Those institutions are Children’s Mercy Hospital, St. Luke’s Health System and the University of Missouri-Kansas City, all of which would share in about $40 million a year from an increase in sales taxes to fund translational medical research.

The Civic Council has emerged as not only one of the prime movers in putting the ballot measure before Jackson County voters on November 5, but also one of the campaign’s big funders.

The Civic Council is a klatch of big business executives in the Kansas City area. The organization has mostly operated behind the scene, using its members’ clout and money to influence various causes. Don Hall Jr., president and CEO of Hallmark Cards, is the chairman of the Civic Council. The Hall Family Foundation wants to spend $75 million to build a research lab at Children’s Mercy, but only if the tax passes.

Other big donors have been connected to the institutions in various ways.

One donor to the Committee for Research, Treatments and Cures didn’t seem at first to resemble the rest of the cast of characters chipping in their funds for the campaign. The would be the law firm of Wagstaff & Cartmell, a group of trial attorneys who work in offices near the Country Club Plaza. They are well-regarded attorneys who handle both plaintiffs and defense trial work. One of their big plaintiff scores was their role in securing a $750 million class-action settlement against Pfizer in 2008. They represented patients who had medical problems from taking a pair of the major pharmaceutical company’s arthritis medications. Wagstaff & Cartmell donated $10,000 to the pro-tax campaign on September 20.

But it turns out that firm lawyer Tom Wagstaff has been on the board of the St. Luke’s Foundation, serving at one point as its chairman in 2011. The St. Luke’s Foundation is a separate but affiliated nonprofit tied to St. Luke’s Health System, which would receive a cut of sales-tax money if Jackson County voters approve the measure. The St. Luke’s Foundation, which finished 2011 with $132 million in net assets, exists to “raise funds to promote medical education and research.”

In 2011, it spent $7 million on research projects. St. Luke’s Hospital, itself a separate nonprofit, in 2011 made $553.4 million in revenue which, after expenses, came out to $39.7 million in net revenue. Its total assets were $1.12 billion that year.

Children’s Mercy has a similar foundation. With $227.5 million in total assets, the Children’s Mercy Hospital Foundation in 2011 sent nearly $7 million to Children’s Mercy for operations support and another $1.5 million for education and research. Children’s Mercy Hospital brought in $816.8 million in revenue in 2011, which amounted to $13.1 million in net revenue after expenses.

It has a $519.3 million fund balance, which hospital vice president David Westbrook told The Pitch in this week’s cover story on the translational medical research tax was needed to maintain a good credit rating.