‘A Vicious Cycle’ Hospitals Seek Long-term Relief On Free Care

Although the Commonwealth’s FY ’06 budget has yet to be finalized, local hospital administrators are saying they’re worried about what the next fiscal year will bring.

 

Indeed, following the release of Gov. Romney’s budget proposal in late January, several health care and public health advocacy groups were vocal with their criticisms of the plan, as were the heads of several medical facilities across the state.

Bill Fyfe, a chapter president of the Mass. Nurses Assoc., for instance, called the budget proposal “neglectful of the state’s most vulnerable” in an MNA statement, and the Mass. Hospital Assoc. took particular issue with what the organization called “staggering under-funding recommendations” to the Uncompensated Care Pool (UCP); specifically, Romney’s recommendation that $120 million in funding for the uninsured be cut.

Horizons brightened following the House and Senate budget proposals; the MHA praised the House of Representatives for recommending an $86 million restoration to the UCP, with the caveat that “much more needs to be done to reform the financing of the health care delivery system.”

And on May 17, the Senate Ways & Means Committee proposed a full restoration of that $120 million, and funding for ‘outlier’ payments for patient stays extending beyond 20 days, which were eliminated two years ago.

No budget proposal, however, takes into account the 7.6{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} projected growth of the free care pool (the Romney administration’s figure). That will likely place hospitals at a funding level much the same as fiscal year ’05, and that has resonated with many Western Mass. health care professionals.

Although they are hopeful that the final budget will reflect something more than the $120 million cut originally proposed, the preliminary numbers suggest that area medical centers are in for another tough year, and under-funding of the UCP is at the top of the list of concerns, because it affects several other issues including health insurance, public health, and quality and breadth of care within area hospitals.

“Right now, hospitals across the state are in a worse funding situation than they were last year,” said Steve Bradley, vice president for Government and Community relations for Baystate Health System.

Bradley said that a cyclical effect is created when the uninsured seek care within the Commonwealth’s hospitals, which are required to serve, and most often, regard care for all as part of a facility’s core mission.

“When the cost of that care is not picked up, it gets passed on to others – to working men and women, to their employers … then the cost of their health insurance policies begin to go up, the employers stop offering them, or the employee stops paying in because they can’t afford it anymore,” he said. “Then they are a part of the free care pool, and around it goes.

“The answer is simple,” he continued. “Care needs to be funded. Otherwise, a vicious circle is created.”

Bradley added that as costs rise for hospitals, cuts to service become an inevitable danger. Already, he said Baystate has had to scale back its behavioral health programming.

Hank Porten, president of Holyoke Medical Center, agreed that the House and Senate recommendations are an improvement, but by no means create an ideal situation for the 2006 budget in terms of health care delivery. While he said cuts to service are a last resort for most hospitals, including his own, the fear becomes more real as the UCP continues to grow and funding continues to shrink.

“The government has been backing off from partnering with hospitals on the UCP for years,” he said. “The under-funding of the UCP as seen in the Romney budget proposal would be devastating to us. The House and Senate numbers were an improvement, but the bottom line is we need that $120 million, at least.”

Porten went on to explain that although the free care pool grew exponentially after funding was cut for MassHealth – he cited 100{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} growth rates – that growth has not slowed to a level at which hospitals can keep up with the demand.

“We’re still seeing 15{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} and 20{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} increases,” he said. “Individuals become part of the UCP based on gross income and a lack of insurance. Essentially, the hospitals become the insurers and we don’t have the money.”

Porten also criticized the lack of detail in Romney’s initial budget proposal, citing what he called sweeping suggestions such as the effort to eventually insure all people in the state.

“The lack of detail can’t go unnoticed, especially in my community,” he said. “What kind of package will this insurance effort include? How much will people pay? Who pays the difference?”

And in addition to a need for more explanation of some major decisions, Bradley said he suspects the Romney administration has lost sight of the gravity of the situation many hospitals find themselves in, especially in the cash-strapped communities of Western Mass.

“It’s not like there’s just one thing going on that’s a challenge,” he said. “About 60{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of all Massachusetts hospitals are losing money. Technology is changing and growing, and we need to accommodate that. Hospitals need to build, but it’s a question of finding the funds.”

He added that health care represents the largest economic driver in Western Mass., and even smaller hospitals such as Mary Lane Hospital in Ware, Wing Hospital in Palmer, or Franklin Medical Center in Greenfield represent some of the largest employers within their respective communities.

“Health care financing is on a disastrous course,” Bradley continued. “If even one of those hospitals were to close, there would be no way for the remaining facilities to absorb the patient population, let alone the employees.”

With concerns firmly stated, however, Porten said he remains optimistic that the Commonwealth’s hospitals will at least receive level funding, and be able to weather another year.

“I have hope that we’ll come out not on top, but where we were last year,” he said.

And Bradley voiced his support for Western Mass. legislators, whom he said, while only representing 13{06cf2b9696b159f874511d23dbc893eb1ac83014175ed30550cfff22781411e5} of the Commonwealth’s elected officials, have been vocal in regard to the health care issues facing the region.

“We’re worried out here in Western Mass.,” he said. “We’re worried that Boston won’t get it until one of our hospitals closes. It’s a challenge, but I’m optimistic that our elected officials will continue to focus, to follow the trends, and plan for the future. There’s a real opportunity here to do what’s right.”