Massachusetts is the only state in the nation where hospitals are losing money from the three major payer groups: Medicare, Medicaid and private insurance payers. As a result, two-thirds of all Massachusetts hospitals are now reporting negative operating margins.
“The Balanced Budget Act, combined with cost cutting by insurance and managed care companies have compromised the future of health care in Massachusetts,” said BWH President and outgoing chairman of the Massachusetts Hospital Association Jeffrey Otten. “While hospitals have reduced costs by more than 24 percent over the past 10 years and eliminated excess capacity, reimbursements have declined. Now Medicaid only pays 78 percent of
the costs of providing care.”
Hospitals have worked hard to deliver their message to lawmakers. In May, more than 150 trustees and CEOs led by Otten and Partners Chairman Jack Connors rallied at the Massachusetts State House to raise awareness. As the 2000 election year gets fully underway, health care will be among the most important issues debated in Massachusetts and throughout the country.
At BWH, the hospital has been able to achieve a slightly positive operating margin in 2000. However, the margin remains insufficient to fund mission-driven activities and long-term investments in buildings, equipment and other capital needs.