Wednesday, November 13, 2013


The classic definition of chutzpah is provided by the man who kills his parents and then pleads for mercy from the sentencing judge on the grounds of being an orphan.

Now, we have a story by Julie Donnelly in the Boston Business Journal about the CEO of a hospital system who bemoans the fact that "any savings from layoffs in the health care industry are constrained by labor agreements that often force hospitals to lay off the youngest, cheapest workers."

Let's recall that it was this CEO who aceded to a neutrality agreement to facilitate the ability of the SEIU to organize his hospital system back in 2009 and who then was responsible for negotiating and approving the collective bargaining agreement with that union.  Such an agreement contains the seniority rules that govern the order in which layoffs occur.  At the time, some of us thought of these as steps along the way to ensure that union's support in front of state officials when the non-profit system's acquisition by a for-profit entity required state approval.

But now, the gentleman pleads for mercy.


Paul Levy said...

Sorry, Ann 11:42, but I don't publish ad hominem comments.

Anonymous said...

There is another way to cut "people costs", which do make up most of the cost of health care.

Just cut salaries by X percent -- across the board. If you cut 1% a year for a number of years compounded, it would add up.

But people in the health care industry now feel entitled to their current salaries, even though they make much more than health care employees in other industrialized countries at a similar level of economic development (even when adjusted as a percentage of GDP).

A more realistic method would be to allow more competition for health care jobs by having common standards across industrialized countries for doctors, nurses, physician assistants etc. The new E.U. & U.S. negotiations have a large focus on services and having common standards. If lots of well trained doctors and nurses could move to the U.S. make 25% more and still make much less than the going rate in their home country, that would provide real competition.

Combining this with eliminating duplication though "accountable care organizations" and lowering drug costs by passing a law ensuring the U.S. patients pay "no more than" the lowest rate given to another OECD country by a drug company would ensure no more "free riders" on drug cost development.

We should get competitive health care costs in this country.

Anonymous said...

There is enormous opportunity to reduce costs. As Paul has posted in the past, health care in the U.S. costs over 17% of GDP. Most other advanced industrialized countries pay 8% to 12% of GDP that is universal (we are not universal yet) and of higher quality (than the U.S.) as shown by health outcomes.

Salaries of health workers make up 60% to 70% of health care costs.

But how do you tell people they are paid too much?

Anonymous said...

Steward has offices full of non union management personnel at their Boylston Street location as well as out in offices in Dedham. All largely non clinical but well salaried jobs that are not producing much in terms of contract negotiations or performance under existing contracts. Millions of dollars in management salaries not producing much return and unable to fill the beds in their very old and empty hospitals. That would be a good place to find millions in savings. I guess they could also close (or threaten to close to get state money) Carney and Quincy which both should have closed years ago and instead just limp along. When he gets desperate to please his private equity masters in New York City he will take aggressive actions in terms of cutting costs so look out below.

Anonymous said...

For routine care a hospital like Carney or Quincy costs less than half as much as an academic medical center like MGH, Brigham and Womens, BMC etc.

There is no reason for a "run of the mill" birth to take place in Longwood. When Quincy reopens it's hospital to birth's next year, they won't have to.

As people have more "skin in the game", they won't want to spend the extra money "out of pocket" to go to Longwood for routine care. The middle class can't afford this.

The only people who will continue getting routine care at expensive academic medical centers are the wealthy or the subsidized.

That is why Carney and Quincy stay open. So that option is available when the proper incentives are in place.

mark said...

Carney and Quincy stay open in hopes of turning a profit for their and where folks who are not subsidized or wealthy are forced to go with their healthcare dollars. It remains to be seen if the care will be less costly , better or even equal to the academic centers. All this being said, a bit of a drift from the issue in Paul's post.

Anonymous said...


According to analysis by Mass state officials there is virtually no difference in the quality for "routine care" between community hospitals, teaching hospitals and academic medical centers.

That is based on the quality statistics (things like outcomes) currently collected by mass state officials.

You make it seem like hospitals will only close if they are for-profit?

According to the Mass Hospital Association approx 30 acute care hospitals have closed since 1980....each one a non-profit.

If hospitals can't make money they close whether for-profit or non-profit.

Massachusetts residents should know it was the non-profit academic medical centers like Partners and Childrens who drove up the cost of care, not the inexpensive for profits like vanguard (now Tenet) or Steward.

mark said...

Closing hospitals is not a profit/non-profit issue, but generally an inability to sustain themselves and pay the bills----the reasons are myriad, but among the reasons is the difficulty attracting and keeping patients. If there were credible figures regarding actual outcomes and costs, I do believe that patients ( as well as the staff and employees of those aforementioned community hospitals) would not be trotting into BID, BMC and Partners for their care. It is naïve and counterproductive to place all the blame for the high cost of healthcare in this state on the academic centers and flawed thinking put a shine on Tenet or Steward as the road to salvation. Clearly I am not much of a typist or statistician, but I have been around medicine in this state for many years and my thinking is grounded in this experience. My colleagues are not rushing to Tenet or Steward and either are the execs of those systems.

Anonymous said...


We have lots and lots of cost information. A recent one from

2011 data from Center for Health Information and Analysis

"Distribution of Physician Group Payments by Relative Price Quartile"

Physician group prices divided into quartiles.

56% of payments went to the highest quartile -

another 27% went to the third quartile

a total of 83% of payments in upper half


6% in quartile one

12% in quartile two

The consistently high price groups were'


There were similar outcomes for hospitals with Partners hospital, UMass, geographically isolated hospitals like those in western mass or the cape and specialty hospitals like Childrens being in the highest quartiles.

We more than any other region in the country send our patients to the most expensive hospitals and physician networks. There is lots of data to support this over the last 6 or 7 years.

The attorney generals report a few years ago was the turning point, after the Boston Globe series on Partners using its market power to get higher prices with no measurable difference in quality for routine care.

The attorney generals report showed there was no valid reason (quality average) other than abuse of market power by Partners

The reason why patients haven't responded by going to the less expensive hospitals - they mostly don't pay. The prices for high cost hospitals or doctors groups is buried in an average cost paid by Insurers overall network

This is changing with limited and tiered networks. But we are in the early stages of that change.

But the hope for community hospitals (including the for profit networks) is that the transition to give patients a financial incentive to shop for care will happen quickly.

for those who worry about the high cost of care, the quickest way to lower costs is to move routine care to community hospitals and out of "high cost" institutions.

Paul Levy said...

I've been posting these comments, but they are pretty irrelevant to the point I made in the blog.

mark said...

Agreed----Chutzpah! TGIF----these are trying times....

Anonymous said...


I agree with your assessment in the original article. De la Torre now appears to be regretting his deal with unions to help him get approval for the buy out of Caritas Christi.

It was expedient at the time, but will cause ongoing problems. He probably feels like the Washington Senators fan in "Damn Yankees".

former employee said...

The gentleman is now being pretty quiet in light of the indictment of the business plan staff he hired from Florida. It didn't take very long for them to get into big trouble and run the hospital system into the ditch. Thankful not to be in his shoes.