BW/F Poised to Tackle Tough Budget
Health care providers can expect budget challenges to continue for several years as state and federal officials focus on increased health insurance premiums and as market forces shift, affecting volume. This uncertain climate has BW/F leaders working with their staffs to identify areas for cost savings for the remainder of fiscal year 2010 and fiscal year 2011, which begins Oct. 1.
“Our focus on delivering the best care to our patients and their families, our commitment to teaching and support for research will be our guide in our budget planning,” said BW/F President Betsy Nabel, MD.
At the state level, Beacon Hill leaders are focusing on private insurance companies and care providers to control costs. Massachusetts Gov. Deval Patrick has called on commercial payers to help small businesses by lowering their prices for insurance, while promising to reject health insurance rate increases deemed excessive. The state Division of Insurance has denied increases proposed by insurers, and insurers lost a court bid to allow them to implement their rate hikes.
Also the state Division of Health Care Finance and Policy held hearings in March to deliver “concrete recommendations to the Legislature on both short-term and long-term solutions to the health care cost problem that can be accomplished through both legislative and regulatory actions.”
And some state lawmakers have suggested caps on payments to hospitals and doctors.
“There is a tremendous amount of uncertainty facing us in the next few years,” said BWH Chief Medical Officer Anthony Whittemore, MD.
In addition, there are signs of cost sensitivity from patients with higher deductibles and co-pays. BW/F, along with the rest of the country, is seeing utilization declines in some service lines, such as Radiology.
“BWH is strong and we will respond to these challenges by strengthening our exisiting referral channels and building new ones,” said Nabel.
On a statewide level, Partners is playing a role in an effort to provide small businesses with immediate cost relief. In April, Partners pledged $40 million in response to a proposal from state Senate President Therese Murray.
“At Partners, we want to be part of the solution. This proposal is considered a one-time strategy, offering short-term relief; the specific details and mechanics are yet to be finalized,” said Partners President and CEO Gary Gottlieb, MD, MBA.
Meanwhile at BW/F, hospital leaders are moving proactively to prepare a multiyear strategic framework to keep the institution strong. The institutions’ mission of patient care, research, teaching and service to the community are the guideposts as BW/F focuses on this issue over the next period. The steps BWH is taking include the continuation of the hiring pause, re-evaluating recent programmatic decisions and working closely with departments to identify additional ways to improve efficiency. For fiscal year 2011, there will be a 3 percent reduction in spending. The BW/F Multiyear Strategic Plan, ongoing Budget Cost Team work and Partners planning efforts will compliment and assist BWH to achieve its goals. In early June, the FY 11 plan will be completed; Partners will review and release the final budget by mid-July.
“This is a multi-year issue,” Nabel said. “We have faced these challenges in recent years, and we have met them head on as a team and accomplished many of our goals. We will need that same determination again this year. Thanks to everyone for everything they do to make the Brigham the remarkable place that it is. BWH leadership will continue to depend on help from our entire community going forward.”