AMONG MASSACHUSETTS HOSPITALS: THE RICH GET RICHER by David Himmelstein, MD

While the health reform bill was still being debated, Blue Cross and Partners Healthcare (the parent corporation for Mass General and Brigham and Women’s hospitals, among others) teamed up in a formidable lobbying alliance. These are surely the two most powerful forces in Massachusetts healthcare, and their lobbying efforts didn’t go for naught.

Blue Cross’ gain from the law was easy to discern. The state required the uninsured to buy private insurers’ policies, opening up a large new market. Blue Cross has been making more than a million dollars a day. Partner’s influence was subtler, largely hidden from public view, but no less rewarding. In its fine print, Chapter 58 shifted tens of millions of hospital dollars from struggling safety net institutions to the large tertiary care hospitals like the MGH and Brigham and Women’ that were already flush with cash.

Those shifts were accomplished by seemingly technical adjustments to how the free care pool reimburses hospitals and the rates Medicaid pays for care. While the detailed mechanisms of the shift are best left for another time, the results are striking.

According to the state’s Division of Healthcare Finance and Policy website, in the first 9 months of 2007 Mass General’s surplus amounted to $275 million; Brigham and Women’s raked in $57 million; Beth Israel Deaconess $73 million; Lahey $64 million; and Children’s Hospital $108 million. For all of those hospitals, 2007 looks poised to be a record year. Meanwhile, Carney lost $1.7 million (after making a surplus in 2006); Cambridge Health Alliance had an operating loss of $4.7 million; and Brockton Hospital was $300,000 in the red on operations. Other hospitals that serve a large proportion of poor patients have also taken a dip. While Boston Medical Center is on track to make a modest surplus, it’s way down from last year, and the same is true of Lowell General and St. Elizabeth’s. And to make matters worse, there’s talk of making up the newly discovered $147 million funding shortfall for Chapter 58 by cutting the funds promised to safety-net hospitals. [By way of disclosure, I should say that I receive income from Mass General, Partners Community Healthcare, and Cambridge Health Alliance – though I obviously do not speak for them.]

What’s the justification for fattening the state’s wealthiest hospitals while the ones caring for the huge remaining pool of the uninsured are starved for funds? Meanwhile poor people face co-pays for prescriptions they used to get free; the near-poor are dunned for premiums they can’t afford; and the middle income uninsured are forced to pay thousands for paper thin coverage.

David Himmelstein is an associate professor of medicine at Harvard Medical School and Co-founder of Physicians for a National Health Program