Jun. 14—Now that COVID-19 is receding, we can clearly see the lingering impact on individuals afflicted with long-term health problems as well as institutions whose business models were damaged along the way. Among the latter are, ironically, healers that are now suffering — hospitals whose efforts were critical in helping communities survive the pandemic.
The state must quickly set to work stitching up the front-line hospitals counted upon to serve low-income communities. Besides infusions of cash, the hospitals' business models need repair, particularly when it comes to reimbursement from the state's Medicaid program, MassHealth.
"Right now safety-net hospitals like Lawrence General Hospital need our support more than ever," state Sen. Barry Finegold, D-Andover, told colleagues in a speech on the floor of the Senate on Friday, May 31. "If we, as the legislative body of the state of Massachusetts, are not looking out for these hospitals, who will?"
Finegold's prescription is twofold — short-term relief that hospitals serving the most vulnerable haven't seen since last year, as well as "long-term structural reforms to hospital reimbursement rates."
The second of these seeks to close the gap in how much the state's Medicaid program pays for services billed by hospitals. Lawrence General, for example, receives less than three-quarters of what it charges to MassHealth.
That imbalance has an exaggerated effect on so-called safety-net hospitals that serve large numbers of low-income patients. A number of those hospitals are doubly disadvantaged because of lean reimbursement rates set by private, commercial insurers.
The cat-and-mouse game of health care providers setting rates, and insurers shorting them, is a strange fissure in the health care industry. What other business could routinely accept less than what it charges and manage to survive?
Now consider the hospitals in that ecosystem that are committed to serving patients regardless of ability to pay; that lean on the state more than other hospitals due to large numbers of patients insured by MassHealth; and that routinely get shorted by just about everyone, including MassHealth. It's little wonder that a pandemic that pushed those same hospitals into the breach of public health — testing and treating their communities for COVID-19, then administering vaccine to stop its spread — also left them financially gutted.
"Community hospitals aren't mismanaging their finances," Finegold assured his Senate colleagues. "They're suffering because of the short-term COVID crisis and longstanding structural reimbursement inequities."
More galling for a community hospital administrator is that those skimpy reimbursement rates aren't evenly applied. As Finegold noted, citing state data, Lawrence General gets less than four-fifths of the average relative price of services billed to commercial insurers in Massachusetts. In other words, those companies will pay around $100 for a chest X-ray in Lawrence but spend $180 on the same X-ray at Massachusetts General Hospital. Nantucket Hospital gets $700 from commercial insurers for a mammogram. Lawrence General gets $260 for the same scan.
That's why, besides a cash infusion and rebalancing of MassHealth reimbursements, the state's safety-net hospitals need intervention to ensure they're not getting fleeced. Finegold suggests this inequity is the result of racism and compares it to redlining — lending practices that steer minority homebuyers away from white neighborhoods. "If these discriminatory practices occurred in the banking industry, the companies would face severe penalties," he said.
Unpacking and addressing these deeply nested problems will take time, which is something that many safety-net hospitals don't have in great supply.
At Lawrence General, President and CEO Deborah Wilson says relief must come quickly, by the end of September and the close of the hospital's fiscal year. Otherwise, the wounds caused by the pandemic, affecting the hospital's services and its long-term viability, will deepen. The hospital has already announced $6 million in cuts, affecting 57 people. "We need to get this relief in very short order," Wilson said in an interview.
Hospitals serving the state's most vulnerable people need urgent help, in the form of direct relief and more reasonable reimbursement from MassHealth. They may not survive the pandemic without it.