Bad treatment for BMC and CHA

By Jim Stergios
October 20th, 2008

The Globe’s Kay Lazar reports on something like page 457 that Boston Medical and Cambridge Health get screwed:

State budget cuts will hit two of the state’s safety-net hospitals particularly hard. Boston Medical Center has been notified it will not be reimbursed $64 million for care delivered to low-income Medicaid patients last fiscal year, and Cambridge Health Alliance will lose out on $40 million it had been expecting, state and hospital officials said yesterday.

OK. We are on the record calling for a decrease in the supplemental payments to BMC and CHA. We believe that with the cost of health reform coming in much higher and the number of uninsured going down, it makes sense on a going forward basis to reduce the special subsidy to BMC and CHA. We believe the road forward is to subsidize people not institutions.

Our recommendation, however, was and is for a prospective reduction – not doing it retroactively, which it seems from Lazar’s reporting is exactly what’s going on. It would seem that these institutions have already delivered a set of services on the basis of an agreement that they would be receive public money to offset their costs. And now the government says it will not pay. A government that backs out of a deal after the fact is no partner you would want to do business with.

Lessons to draw: (1) We need transparency, not only regarding clinical outcomes and cost, but also on finances—on payments. With the current lack of transparency, there is no way for adults in a room to have a real data-driven discussion on this topic. It poisons the waters for all hospitals. If we want to provide supplementals, great, do it, but do it on the basis of data. (2) We need a government that does not create outlandish budgets and then back away from commitments.

No outcry yet from Dennis Keefe of CHA or Marsh Carter, Chairman of BMC. Expect it – and they are right.