AS NATIONAL policy makers fashion a healthcare bill modeled in no small part on Massachusetts’ landmark health reform law, they need to address a major flaw that has emerged here.
Three years into our healthcare experiment, health coverage gains have been remarkable. Medicaid enrollment is estimated to have grown from less than 1 million before the reform law to 1.2 million in 2010, and altogether, in Medicaid and private plans, more than 428,000 have gained coverage. Families and individuals who had never had health coverage have access to health plans and services that were previously unattainable.
At the same time, however, hospitals that serve the largest proportion of those newly covered and low-income populations have seen their state-funded payments diminish or be eliminated. By receiving lower rates, they have helped to subsidize health reform. But the consequence of their diminished rates is financial losses and the prospect of the loss of critical services for poor and disadvantaged populations.
By design, the state’s landmark health reform was supposed to “true-up’’ Medicaid rates, raising them closer to cost than the current 60 percent to 70 percent reimbursement of cost, a critical step since Medicaid enrollment growth has been a key component of health reform. Instead, as health reform has been implemented, rates have declined for many hospitals, and special payments for hospitals that serve a disproportionate share of low-income patients have been eliminated – long before the current recession began.
That is the core issue surrounding Boston Medical Center’s lawsuit against the state – a grave concern that other safety-net hospitals seek to compel the Commonwealth to address.
In Washington now, as in Massachusetts in 2006, who will pay for this coverage is hotly debated. In Massachusetts, officials took the federal Medicaid disproportionate-share payments designed by federal law to support hospitals that serve the needy and built them into expanded Medicaid and subsidized Commonwealth Care coverage. But this has left those hospitals, located in the state’s poorest urban communities – Lawrence, Holyoke, Brockton, Boston, Fall River, Cambridge, and others – with no compensation from Medicaid for the vast amount of care they deliver at rates that are still well below cost.
In our state and around the nation, poor whites, African-Americans, Latinos, and Asian-Americans get their care at certain hospitals – the hospitals in their backyard. These hospitals have been the state’s partners in providing care for those who have gained coverage under reform. Despite this unique role, the hospitals have been abandoned and are compelled to deliver care with fewer resources.
Healthcare for these populations is largely separate and it is rapidly becoming unequal.
A word of caution to the Obama administration: Policy makers looking to Massachusetts as a model for national health reform had better keep a watchful eye on Boston Medical Center’s suit, and reconsider the wisdom of redirecting scarce Medicare and Medicaid disproportionate-share dollars away from hospitals that serve the poor. Expanded coverage must go hand in hand with financially stable providers. In the worst-case scenario, coverage that’s financed by eliminating the payments that underpin healthcare services to the disadvantaged is a roadmap to rationing of care.
Many of us who have advocated for universal coverage applaud the dramatic gains and successes of Massachusetts’ health reform law. It shows that innovative policy can overcome longstanding obstacles. Our experience also shows, however, how carefully and cautiously the redirection of scarce dollars must be made. The role of hospitals in poor communities is especially important in our society, but they have not been treated fairly in Massachusetts, and the gross inequities are becoming more apparent.
While we recognize that the present fiscal crisis means we must focus attention on bottom-line numbers, Massachusetts really needs a policy based on substance and the reality that people are directly affected by the plight of safety-net hospitals. The Boston Medical Center suit points out that healthcare reform will fail in its objectives if it serves to dismantle healthcare services for the disadvantaged that it was designed to serve.
Ellen Murphy Meehan is a healthcare consultant and executive director of the Massachusetts Alliance of Safety Net Hospitals.
