In most businesses, more customers mean more business. And, more business means more profit.
Not in the hospital business! The more customers hospitals get, the more money they lose. This year, hospitals in Massachusetts will lose $200-million. Or more.
Here’s why.
They’re not getting adequate reimbursement from Medicaid, from the state’s uncompensated care pool, or from insurance companies.
So hospital administrators across the state are summoning their legislators to group meetings to discuss the crisis. Yes, crisis. Last week, I joined Noble Hospital’s George Koller, and other area hospital administrators, state representatives and senators for a meeting to find out just what hospitals want.
For starters, hospitals are asking legislators to increase funding for Medicaid. Right now, Medicaid covers only 71 percent of hospital costs. The hospital spends $100 on you and they get $71 back. Not good math and an increase is obviously necessary.
Hospital directors in Western Massachusetts say they need an increase of at least $200-million more to cover costs this year alone.
If the state puts in $130-million of that, another $65-million will come from the federal government. But, we haven’t budgeted anywhere near that amount.
The House didn’t adequately fund the Medicaid program which covers health care for the poor; and the Senate only put $35-million in the budget, the budget that’s still in conference committee to iron out differences between the two branches.
The budget’s largest increases each year go to health care and education. But, it’s not enough. The budget is overloaded with demands.
Where else can we find the money? The state has a $518-million surplus. Last year we took in more money than we spent. So, we could take $200 million of it and help put our hospitals in the black.
But that is short term. One year. My friend Nancy Flavin, the Easthampton State Representative, said hospitals need more like $3-billion long term.
Putting more money into our hospitals is important because continuing losses mean delays in physical plant improvements, which delay treatments; losses mean that hospitals have difficulty fairly compensating and retaining staff; losses mean that services decrease while people, especially the growing elderly population, demand even more services.
Right now, more than half of our hospitals in the state are losing money. I hasten to add, that our own Noble Hospital is in the black.
Athol Memorial, a rural hospital, almost closed two years ago. With a $5-million payroll for 250 people, it’s Athol’s second biggest employer. It is losing $1-million to $1.5-million a year. A spokesman told the assembled legislators that maintenance has been ignored on everything from the roof to serving tables for 10 years.
Franklin lost $2.4-million last year. Cooley Dickinson lost $2.2-million. Mary Lane hovers around the break-even point, but has hit an 18 percent staff vacancy rate. Baystate systems lost $29.7 million last year, with $24-million of that at Baystate Medical Center.
Right now, Massachusetts hospitals are unable to recruit physicians. There are particularly acute shortages of anesthesiologists and radiologists. And, pharmacists, too.
Baystate has cut VNA/Hospice visits (and staffers) by 50 percent.
"We are," said one administrator, "in a desperate situation." Added another, "The people we serve have high expectations about quality care, and I’m concerned about our ability to continue to provide it."
If the current trends continue, more hospitals will be in serious trouble.
What’s at stake?
Acute care hospitals in the area–Noble, Mercy, Holyoke, Baystate, Athol,
Berkshire, Cooley Dickinson, Franklin, Fairview, Mary Lane, North Adams and
Wing Memorial--employ 13,000 people and have an annual $438-million salary.
They admit more than 86,500 patients a year. They stay a total of 480,000 days. Another 391,000 go to the emergency rooms; another 1.4-million use the various clinics and other hospital services. And, 9,600 babies are delivered at the hospitals.
And you? Well, you might be diverted from a busy emergency room at Noble to one in another city. Your surgery may well be delayed. Your neighbors could lose their jobs. Your hospital could close (26 closed in the past decade).
With hospitals in "code red," the state has to boost Medicaid payments and reduce the hospitals’ payments to the statewide care fund for the pool, and provide low interest loans to distressed hospitals.
And, don’t even get me started on HMO and insurance company reimbursements. I’ll save that for another time.