This is a blog by a former CEO of a large Boston hospital to share thoughts about negotiation theory and practice, leadership training and mentoring, and teaching.
The readers' comments are as interesting as the article---there is a LOT of misinformation and misunderstanding out there, and a LOT of characterizing an entire institution from one experience, good or bad. (We should all remember this in our daily practice!)I had to laugh though, when I read the comment that "doctors in Boston SHOULD earn more than the doctors in Topeka because the cost of living is so much higher here. Actually, the complete OPPOSITE is true! (wish I knew why) Also, let's compare apples to apples---that certainly doesn't explain the disparity between Partners and the other BOSTON hospitals.Let's hope that the end result of all the investigations is not to cut Partner's reimbursement, but to raise the rest of ours to the same level and (gasp!) maybe cut into the insurance companies' huge profits and CEO bonuses? Because after all, what useful service are they providing? Are they curing disease or relieving pain? No---they are in the business of transferring money from patient groups to provider groups, while taking their own cut every time. Not much difference between them and the greedy financial services providers who have triggered the downfall of the global economy.
Boston Medical Center Chairman of the Board Marsh Carter sent a letter to Governor Patrick regarding the inequities in our state's health care system brought to light in Sunday's Boston Globe. November 18, 2008Dear Governor Patrick: The Boston Sunday Globe article by the Spotlight Team has shone a very important light on the widening inequities in our state's health care system. The disparities in payments from private insurers to certain favored providers without a clear connection to quality or greater cost efficiency should trouble us all. A cynical person could draw the conclusion that there may be a double standard for inner city patients.The fact that hospitals such as Boston Medical Center, which care for a patient population much less attractive to private insurers, are at a clear and distinct disadvantage may have been eye opening to some, but it was not news to us. Our unique and challenging patient population, and the reality that the number of our patients private payers insure will never equal that of other providers, makes it unlikely we will ever receive such high rates from private insurers. And yet, Boston Medical Center has been able to not only survive but also excel in this highly competitive market, providing exceptional care without exception to all who come here, in large part because of public support. In a system in which the hospital that cares for the most vulnerable is unable to receive fair treatment from traditional payers, the Commonwealth, as the dominant purchaser, has always played a critical role in restoring balance and maintaining stability for our safety-net providers. Sadly, that all changed this year with the precipitous and possibly disastrous cuts your administration levied against Boston Medical Center in the most recent round of state budget cuts. In total, Boston Medical Center is facing $178 million in cuts for Fiscal Years 2008 and 2009, including Medicaid rate cuts, an astounding 64% of all hospital cuts announced for those years. We currently receive only 61 cents of every dollar from programs serving low-income people -- a group that represents 51% of our patients. Medicaid comprises 31% of our total patient revenue, and we currently are facing a reduction in Medicaid payments from $12,100 per case down to $9,200. That is a 24% cut, larger than any other hospital in the state. That $9,200 rate is only a few percentage points higher than what we were paid by the Medicaid program in 2001, despite the fact that our costs today are 38% higher than 2001. There is not a health provider in this state, or for that matter the nation, which has not experienced similar cost increases during that time. Most troubling is the fact that only Boston Medical Center and Cambridge Health Alliance have seen their 2009 Medicaid rates taken down so drastically. In fact, most hospitals were held at their current 2008 levels. Also, you may be as amazed as I was to learn that Brigham and Women's Hospital actually saw its 2009 Medicaid rates increase! We clearly appreciate the difficult choices you face in this current fiscal crisis. However, we cannot help but feel that we have been forced to accept more than our fair share of the pain. As Chairman of the Board of Boston Medical Center, I feel it is my responsibility to inform you of the serious and damaging effects that these cuts will have. The only way for Boston Medical Center to survive would be either by following the financially unsound course of spending down our reserves, which have been built up by excellent management and aggressive expense control over many years, or through a series of drastic reductions in care and services for the needy and vulnerable patients who we serve. The management at Boston Medical Center has always employed sound business practices and made efficient and responsible use of all its funds, including the public support the hospital has received. Our operating margin is at the number deemed minimally acceptable by the attorney general for a hospital to be considered financially stable. By forcing Boston Medical Center to cut into its balance sheet and deplete its reserves, the Commonwealth is, in effect, holding us to a different standard, as well as a secondary standard for our patients, than other hospitals with similarly healthy finances. Other hospitals with strong balance sheets are not seeing their Medicaid payments reduced at all. Once again, this appears to be a redistribution of dollars away from hospitals caring for the greatest percentage of the poor to those caring for the fewest. The Globe Spotlight article demonstrated that so-called "supplemental" payments do, in fact, come in different forms. For large and more powerful hospitals that care for patients with higher incomes and the best insurance plans, those subsidies come in the form of higher payments from private insurers. But for safety-net hospitals like Boston Medical Center and Cambridge Health Alliance that serve all regardless of who they are or how much money they have, the costs simply cannot be covered without public support. Shifting resources away from safety-net hospitals that care for the poor may save some money now. But in the long run, I am confident this strategy will only cost more in both higher costs and harm to the public health. If these actions truly are part of a larger agenda, then we should have a true public debate over whether abandoning a hospital that provides the highest-quality care for all, regardless of status or ability to pay, is a direction the people of the Commonwealth choose to take. In difficult times such as these, I believe we should do all we can to protect the most vulnerable among us. We reject the notion that the patients at Boston Medical Center should receive a secondary standard of care simply because of who they are. I trust that you share these beliefs. And I remain hopeful you and your administration will see fit to reverse this inequitable state of affairs and do right by a community and patients whose public and personal health respectively depends on Boston Medical Center's financial health.I would welcome the opportunity to discuss these matters with you or with Leslie Kirwin. Sincerely, Marshall N. Carter
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