As the recession (?depression) unfolds, the state’s financial crisis will surely deepen. Inevitably, further health budget cuts lie ahead. Unfortunately, the first round of cuts follows the same pattern pursued by the Patrick administration in the past: loudly declare your concern for the poor, while quietly shredding the health care safety net they depend on.
A little noticed feature of the first stage of health reform shipped additional millions of Medicaid dollars to the rich and powerful teaching hospitals and drained them from primary care. In a widely trumpeted move the state upped Medicaid rates for inpatient care – a change that mainly benefited Partners and other financially healthy institutions that provide expensive tertiary care services. (In 2007, the MGH reported a surplus of $354 million, while Brigham and Women’s Hospital had a surplus of $48 million in the second quarter of 2008). But at the same time Medicaid and free care pool payments for outpatient services were shrunken, dealing a body blow to cash-strapped institutions that provide a large volume of primary care to the poor.
On top of this, the state withheld tens of millions promised in the legislation to Cambridge Health Alliance (CHA) (disclosure – that’s where I work) - the only public hospital system left in the Commonwealth. The cash shortage has already cost CHA millions in interest costs.
The latest round of cuts inflicts further wounds on CHA and Boston Medical Center – the other large safety net provider in eastern Massachusetts.
Not only will Medicaid rates for the future be cut, the state is demanding a refund of $100 million from past payments to those two systems.
At CHA we’re seeing more uninsured patients than ever, but our funding from the state has been slashed by tens of millions. In the second quarter of 2008 alone we lost $25 million, hundreds of health workers have already been laid off and clinic closures are in the offing.
In the months ahead, tens of thousands of workers in Massachusetts will lose their jobs – and their health insurance coverage. Many will need safety net and subsidized care. The costs of subsidized coverage under Commonwealth Care will predictably rise and the state’s fiscal condition will deteriorate even further. The promise of universal coverage will be broken – and the safety net that cared for the uninsured for decades before health care reform will be left a shadow of its former self.
What are the alternatives? In the short term: cut from the wealthy teaching hospitals that have been racking up huge surpluses for years, rather than the poor ones that are already staggering. In the long term: implement a single payer system that saves billions on profit and bureaucracy, and use the savings to cover the poor and to upgrade coverage for the rest of us.
Associate Professor of Medicine at Harvard Medical School
and Co-Founder of Physicians for a National Health Program
This program aired on October 20, 2008. The audio for this program is not available.