A Boston Globe headline today reads Boston Medical sues state for funds. Replace “Boston Medical” with “Local Hospital X” and “state” with “federal government,” and you’ll have tomorrow’s headline. And it will dominate newspapers across the country, should Obamacare become law. First, though, some history.
When Massachusetts passed their health reform law in 2006, one of the major reform elements was an agreement between state and federal officials that would redirect federal Medicaid funds which were previously flowing to “safety net” institutions, like Boston Medical Center, for uncompensated care. They would instead use them to help the poor buy coverage. The thinking was that as more of the poor gained access to health insurance, more hospital services would be paid through health plans, and the need for uncompensated care dollars would decrease. Not a bad idea, in principle. Sound familiar? It should. Just last week, President Obama announced a deal with the nation’s hospitals to “save” $150-155 billion over the next ten years to offset the cost of a health reform plan with a price tag in excess of a trillion dollars.
How did everything turn out in Massachusetts? Well, despite a healthy decline in the number of uninsured, the state has not moved uncompensated care dollars away from hospitals as quickly as it had agreed. This is partially because it has continued to deliver special payments to certain politically-favored institutions (Boston Medical included). Now, three years into the reform, the state is actually beginning to follow its plan for financing the reform and (surprise!) hospitals are crying foul.
So, should Obamacare become law before Washington can show us the money from the savings it’s banking on, expect to see the same politics in play when it comes time to pony up and pay the bill.