Tag Archives: boston

Mass. reform, cost-cutting crush safety net hospital

Boston Medical Center has been pushed to the financial brink by a mix of politics, economics and expanded health coverage. In Boston Magazine, Eileen McNamara examines the forces that are dragging down the commonwealth’s largest safety net hospital, in the process painting a cautionary tale of what happens when universal health care and cost-cutting collide. If it keeps eating through its financial reserves at the current rate, the hospital will become insolvent next year.


Photo by Wade Roush via Flickr

BMC is in a unique position, thanks to a legal mandate (not shared by its wealthier, Harvard-affiliated competitors) that it “consistently provide excellent and accessible health care services to all in need of care, regardless of status or ability to pay,” McNamara writes. In return, the state is supposed to compensate for its disproportionate load of low-income patients. Instead, the state’s clamping down on Medicare reimbursement.

BMC is locked in a battle with the Patrick administration over dramatic cuts in how the state pays for treating the poor. Barring a last-minute settlement, a Suffolk Superior Court hearing on September 29 will consider the state’s motion to dismiss a BMC lawsuit that challenges Massachusetts’ reimbursement rate. (The state currently pays the hospital 64 cents for every dollar it spends on patients with Medicaid.)

BMC says the new reimbursement formula violates state and federal law, and will sound the death knell for the state’s largest safety-net hospital. The commonwealth says it has the power to set any rate it wants; if BMC finds the payments inadequate, it can simply stop taking Medicaid patients. The state’s argument might have some merit in the case of doctors being free to choose their patients, but it’s a ludicrous posture to adopt toward an inner-city hospital that is required — by state law — to serve all comers.

On MedpageToday, Kevin “@kevinMD” Pho, who trained at BMC, pulls no punches as he riffs on McNamara’s article.

Universal coverage makes great headlines, helps get politicians elected, and, to be fair, is something that needed happen. But doing so without adequately addressing its cost is going to bankrupt hospitals, especially inner-city ones like BMC. That will hurt the Medicaid and Medicare patients dependent on them.

And that’s a goddamn shame.

Hospital claims reform causing financial woes

Sean Kelly of WCVB-Boston reports that, despite suing the state on the grounds that financial difficulties caused by Massachusetts health reform could cause it to close within a few years, Boston Medical Center paid its outgoing CEO a $3,466,458 “in recognition of exceptional performance over a period of 15 years.”

This one-time payout, agreed upon in the terms of Ullian’s 2005 contract, came on top of the $1,348,504 in salary and benefits she earns annually. Kelly reports that her annual compensation is “on par with that of other hospital CEOs in the Boston area.” Watch the broadcast here.

In light of the national health care debate, it is interesting to note how the hospital says reform in that state has affected it. Its lawsuit claims that, since reform was enacted, “the way hospitals are paid to provide medical care to the poor and uninsured changed for the worse. Officials say they are now paid only 64 cents for every dollar of care delivered.” The hospital claims it is losing tens of millions of dollars because it treats more subsidized patients than other hospitals.

In July, when BMC’s lawsuit was filed, a spokeswoman for the Executive Office of Health and Human Services acknowledged that “the fiscal downturn has required reductions to BMC … that are proportionate to” the number of low-income patients it treats. But she went on to say that “even with budget reductions, BMC will receive approximately $400 million in direct payments” for fiscal year 2009. The medical center was also due to receive $1.1 billion for BMC HealthNet, the health plan it manages.