Health Provider Predicts Big Loss; Unions Blame Everyone Else

The Boston Globe reports that all is not rosy in the people's socialist commonwealth of Massachusetts. A new law there requires all hospitals to render care to the uninsured, but only reimburses 70% of the costs.

The result, as you might guess, is diasastrous; or as the Cheif Administrative officer of one hospital put it, "This would be catastrophic."

Health provider predicts big loss
Hospital alliance cites impact of reform law; Could cut 300 jobs, suffer $25m shortfall
By Jeffrey Krasner, Globe Staff / March 17, 2008

Health Alliance, a key part of the Boston area's healthcare network, is facing a potentially "catastrophic" loss this year and is looking to eliminate up to 300 jobs, or about 9 percent of its workforce, in an effort to stabilize finances. The alliance, which includes Cambridge Hospital, Somerville Hospital, and Whidden Hospital in Everett, says it is being hit hard by the state's new healthcare reform law, which has left it responsible for providing free care for those without insurance while reducing the hospitals' compensation for such services.

Before healthcare reform took effect last year, Keefe said, Cambridge Health Alliance was reimbursed by the state for the full cost of providing services to the uninsured. Under the new system, "we only get 60 to 70 percent," he said. The reduction is particularly significant for the alliance because its hospitals serve a high percentage of uninsured patients. Despite the state's efforts to enroll all low-income residents in free or subsidized insurance programs, many still do not have coverage.

Keefe said the hospital was especially bruised in its second fiscal quarter, which ended Dec. 31, when the new payment system for uninsured patients took effect. Government payments for free care to the uninsured fell by nearly $14 million compared with the previous quarter, he said.

At the same time, the number of patients admitted to the alliance's hospitals dropped by about 3 percent, while patients kept overnight for observation - a category for which insurance companies do not pay as well - grew by 48 percent. Additionally, the number of walk-in patients, which do not generate as much revenue as inpatients, also grew substantially in the six months that ended Dec. 31, Keefe said.

During a department meeting last month, the chief administrative officer of the health system's physicians' group predicted a potential loss of $25 million to $35 million for the year. "This would be catastrophic," Dave Porell told members of the Department of Psychiatry, according to the approved minutes of the meeting, which were obtained by the Globe.

Prediction: This will get far, far worse before it gets beter. Some chains will actually begin to pull out of Massachussetts before the legislature repeals or severely amends the act. And, of cousre, the lefties will blame the "evil corporations" for not funding healthcare for the poor.

Hat Tip: And Rightly So!