October 5, 2009
BOSTON MEDICAL Center, the city’s main health care provider for poor and minority residents, is at a dangerous point. Its projections show serious and increasing budgetary shortfalls, while its departing chief executive, Elaine Ullian, is under fire for taking a $3.5 million severance bonus and copping almost $1 million per year for being on the boards of companies doing business with her hospital.
It is a story that reflects the sad state of health care, where the real challenges of serving lower-income patients run up against a complicated, expensive, and sometimes corrupting set of institutional forces. Ullian, whose ability to define BMC’s mission and persuade officials to back it played a large role in making the merger of Boston City Hospital and University Hospital a success, showed terrible judgment in accepting such a large payout and in feathering her nest on corporate boards.
The $3.5 million, while excessive, at least came in lieu of a pension. The corporate boards are more problematic, since the three local companies – makers of medical equipment, lab instruments, and drugs – all do business with her hospital. Her defense is that she was not involved in approving the contracts with those companies, and that such entanglements and lucrative payouts are common in the health industry. That’s the problem: the government can’t be expected to subsidize the greed and inefficiency and insider dealings of a manifestly broken system.
This, by the way, is why health care reform is necessary nationwide, and why the Globe believes a public insurance entity is necessary to drive down the costs of medical providers and drugs.
With all due hope that the structural problems in health care are being addressed at the federal level, the state still must wrestle with BMC’s predicament. The hospital has filed a lawsuit accusing the state of reneging on payments earmarked for hospitals serving a disproportionate share of Medicaid patients. The state felt such payments were no longer necessary because of its promise to raise Medicaid reimbursements from an estimated 64 percent of actual cost to 90 percent. But the planned increase never materialized.
The hospital is not in imminent danger, since it still carries large cash reserves. Ullian is due to leave her post in January. This gives the BMC board a chance to show restraint and financial prudence in appointing her successor and setting sensible limits on his or her potential conflicts of interest.
The Patrick administration should then negotiate a settlement that preserves the vitality of a crucial inner-city resource, while attending to the state’s very real budget crisis. In this unfortunate health care environment, the needs of public health should predominate. Sick people shouldn’t pay for abusers of the system, and abusers shouldn’t hide their greed behind sick people.
