Massachusetts last week received notice of federal approval of a Medicaid waiver that will provide $335 million for the state's safety net (aka, disproportionate share) hospitals. This is good news for the state in general and specifically for Boston Medical Center, Cambridge Health Alliance, and others who have seen a dramatic reduction in state support following the implementation of the MA health reform legislation.
I refer my readers to an excellent give-and-take on this issue here at the Heritage Foundation site. Josh Archambault claims such funds are a kind of unwarranted bailout given other options available to the state, but then Dennis Keefe, the CEO of CHA, provides a thoughtful rebuttal.
But the two writers talk past each other a bit. Here's Josh:
One, in order to make budget numbers work in a period of economic freefall, Governor Deval Patrick refused to make payment to BMC for Medicaid services already rendered. So the federal money possibly on its way to BMC could be another special deal to paper over Massachusetts’ budget woes.
Second, the budget gaps these hospitals face are reason for even more concern because of the President’s recently passed national health plan.
And here's Dennis:
You begin your piece by saying we are “turning to the feds” for a bailout to close our budget gaps. That simply isn’t true. We simply want and expect to be paid for providing important services for people who desperately need health care and have no place to turn.
It’s simple math; the greater the amount of care an organization provides to populations served by these programs, the greater the financial shortfall, and the greater concomitant need for additional revenue support.
Gentlemen, you are both correct. CHA, BMC and other hospitals absolutely deserve extra governmental help to help pay for indigent care because the new reimbursement system that was put in place by Chapter 58 and subsequent state budget actions systematically underpays them.
But the need for such funds is likely to expand nationwide under the new national law as poor people gain access to insurance plans that do not fully compensate hospitals. The difference at the national level is that the US Government cannot tap a higher level of government for the funds, the way Massachusetts can. Those funds will have to be generated by tax increases or reductions in appropriations. We are already seeing actions to reduce reimbursements from Medicare. That is a form of taxation on hospitals and doctors that is invisible to the public and the one that will be favored by the body politic.
The President promised access, choice, and lower costs in his health care bill. Only two out of three were possible. We will have access. The government will be reluctant to reduce choice. Lower costs -- but only for the federal government -- will be achieved by reducing appropriations.