Boston Capital

Looking for a level field

By Steven Syre
Globe Columnist / December 1, 2009

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HOLYOKE - Hank Porten, the chief executive at Holyoke Medical Center, points to the empty lot where he wishes he could build office space the hospital needs for doctors. Don’t hold your breath.

Porten’s own office is a fancy trailer behind the medical center in the employee parking lot, restroom not included. His hospital routinely scrapes by with only enough cash to pay about three weeks of expenses. He describes its financial rating as “trash bond minus,’’ which explains everything you need to know about his ability to borrow money.

So it’s no surprise Porten counts himself among six hospital chiefs expected to sue the state today to get more money for treating poor and aged patients. But hospitals trying to squeeze more cash out of the state is only part of the story.

Porten will tell you that the math behind the state’s reimbursement to hospitals that care for large numbers of poor patients is tilted to favor a few, and Boston Medical Center benefits like no one else. He hopes the hospitals’ day in court will do something to level the playing field.

“Why are the Holyoke poor different than the Boston poor?’’ Porten asks. “If there’s a difference, just tell me. But no one’s been able to do that. We look very similar to the poorest neighborhoods of Boston. If we’re the same, pay me something similar.’’

That’s an argument over the size of slices of a shrinking pie. State support for health care is being cut in the midst of a intense budget crunch. Financial support for Boston Medical Center and, to a lesser extent, the Cambridge Health Alliance, was a sore spot for suburban and rural hospitals in better times. Now it’s something more acute.

Boston Medical Center has $190 million in unrestricted reserves. It’s been able to earn a reliable annual operating profit, until this past year. And its credit rating remains sound enough to borrow money when needed.

“The perception is that BMC takes care of all the poor in the state and that’s not the case,’’ says Porten, whose hospital has less than $4 million in reserves. “But they seem to be treated more robustly, and the rest of us are flopping around for change.’’

Robust is not a word you will find anywhere in Boston Medical Center’s own lawsuit filed against the state over the summer. The hospital alleged the state illegally cut payments for treating poor patients, just as the six hospitals suing today will contend.

Boston Medical Center is now bleeding money, losing $12 million a month, trying to operate in a deep recession with less state help, said Tom Traylor, vice president of state and federal programs at BMC. He thinks past differences with other hospitals are beside the point right now.

“Whatever issues they may have had about the past - I could dispute them - but they don’t seem relevant at this time,’’ says Traylor. “I don’t see what value there is in thinking things are unfair vis-a-vis Boston Medical Center.’’

Porten thinks the value of the debate is about how hospitals will be paid going forward.

The state’s financial squeeze isn’t going away in the next month, or even the next year. He hopes the lawsuits will push government to explain how much money it’s giving to individual hospitals and why.

That, said Porten, will ultimately benefit the most efficient hospitals and make sure they are paid fairly.

“I don’t think there has to be more money, or new money, for health care,’’ he said. “We just need to figure out what we’re doing. I think there has to be a formula that’s not black-box oriented, that’s truly transparent and shows all of us how we actually get paid.’’

Every debate in health care would benefit from more transparency about what things really cost and who gets paid what. That’s just as true for Boston’s world-class medical centers as it is for hospitals that treat more than their share of the state’s poor and elderly patients. Good luck finding it.

Steven Syre is a Globe columnist. He can be reached at