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EDITORIAL: The Future of State’s Community Hospitals in Beacon Hill Hands

October 18, 2018 GMT

After failing to agree on health-care reform legislation in their last formal session, state lawmakers must now prepare to make another attempt at stabilizing the financial condition of community hospitals and curbing overall health costs.

The Senate passed a health-care policy bill last November, but the House didn’t approve its own version until June, due primarily to the death of Rep. Peter Kocot, the House bill’s author. The House’s proposal would apply $330 million in new assessments on insurers and large hospitals to help prop up struggling community hospitals.

The Senate version included a “rate floor” for insurance payments to help those hospitals by mandating they be paid at least 90 percent of the average price of a medical service.

However, the two branches couldn’t broker a deal by the end of July.

According to previous reporting by the State House News Service, 27 medical centers -- including Lowell General Hospital -- receive less than 90 percent of the statewide average commercial rate. Like LGH, many of those hospitals serve diverse “Gateway Cities” like Lawrence, Brockton and Holyoke, communities with large minority populations that were paid 85 percent of the state average or less in 2016.

We supported the House plan, because the Senate funding mechanism wouldn’t help hospitals like Holyoke Medical Center, which serves mostly poor and low-income patients who can’t afford commercial-rate insurance, thus negating the benefits of those higher payments.

Those previous bills also didn’t address rising MassHealth costs -- the low-income program that consumes 40 percent of the state budget.

The Legislature did approve assessments on employers in 2017 to help defray some the program’s costs. Effective through 2019, they’re expected to generate $400 million. But that’s a drop in the bucket compared to its $16 billion price tag.

However, the main roadblock to health-care reform in the previous session remains the same -- finding common ground on a funding mechanism for community hospitals. The previous House version, which included $247.5 million in assessments on insurers and $90 million in assessments on the largest hospitals, was vehemently opposed by the hospital lobby.

And that negative sentiment will grow exponentially if Question 1, the ballot measure that limits the number of patients assigned to each nurse in hospitals and health-care facilities, passes in November.

Leaving the merits of the question aside, according to the Health Policy Commission, an independent state agency tasked with analyzing health-care policy, Question 1 would cost $676 million to $949 million to implement and require the hiring of 2,286 to 3,101 additional full-time nurses.

These costs would affect community hospitals as well, and complicate any financial relief measure weighed by the Legislature.

Lawmakers will have two months to digest the impacts of Question 1, no matter which way the vote goes, before convening in January.

That result will dictate the prospects of passing a compromise financial relief package for community hospitals and any health-care cost reforms.