After building a strong foundation for financial stability over the course of the last several years, BWH and Partners HealthCare enter the Fiscal Year 2004 budget cycle with a wary eye toward a shifting and uncertain economy. With key governmental payers struggling under the weight of record deficits at the state level, BWH and hospitals throughout the state are facing new challenges.
With the Commonwealth of Massachusetts facing a deficit of approximately $3 billion in the coming year, difficult cuts have already been made to MassHealth, Medicaid reimbursements and the free care pool. The impact of these cuts at the Partners level has been estimated to be as high as $100 million.
“While we are fortunate to have managed our financial position relatively well over the last several years, the challenges we face in FY 04 are formidable,” said Andy Whittemore, MD, chief medical officer. “It will be very important for us to monitor the public policy debate at the state level to better understand the degree of impact that these cuts will have on our mission to provide exceptional care.”
For the first time, the hospital will coordinate its FY 04 budget process with that of the Brigham and Women’s Physician Organization (BWPO) and will collaborate with the Dana Farber Cancer Institute (DFCI) with respect to the inpatient oncology services it provides through the Dana Farber-Brigham and Women’s Cancer Center.
The development of the FY 04 financial plan is currently underway and preliminary budgets will be sent to the Partners HealthCare by mid-June. The FY 04 budget will assume growth in discharges and outpatient volume at 2.5 percent and 3 percent respectively with a goal to achieve a 4.5 percent margin target.
“The margin target is especially important given the aggressive capital improvement plans underway at BWH and throughout Partners,” said Roger Deshaies, chief financial officer. “The challenge of achieving that target is compounded by what is happening in state government and by the impacts of inflation. We are in the process of trying to close that gap now so that we can continue to fund the mission of the organization appropriately.”
More information about the FY 04 budget will be shared in the months ahead.