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Facing uncertainty, BMC is right to consider cost-cutting moves

Steeling itself for upcoming federal and state cutbacks, Boston Medical Center is now considering plans to shutter its East Newton Street campus — an artifact of when the former Boston City Hospital merged with the nearby University Hospital in 1996. Combined with efforts to provide more care in outpatient settings, however, this decision could be a pragmatic, strategic one that will shore up the hospital’s future.

It’s a time of great fiscal uncertainty for the nation’s safety net hospitals. Caring for a larger share of uninsured patients than competitors, such providers will gain a new source of revenue under the Affordable Care Act as millions gain coverage. At the same time, however, the law’s mandatory spending cuts for Medicare and Medicaid are a significant hurdle for the medical centers, which tend to operate with minuscule profit margins.

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As New England’s largest safety net hospital, Boston Medical is hardly immune to this upheaval. It anticipates up to $40 million in potential federal cuts alone. But under chief executive Kate Walsh’s watch, it’s shown the willingness to tackle tough spending decisions straight on and has improved core operations, even eking out a small budget surplus last year after three years in the red.

Walsh, appropriately, has acknowledged what a difficult call closing the former campus of University Hospital would be. Boston Medical would downgrade from slightly less than 500 to about 400 beds, and hundreds of staff could be displaced. Still, as things stand, more than $2 million is being spent annually transferring patients two blocks from one campus to another. That’s money that could go to patient care.

Plus, finding effective ways for people to spend less time in the hospital — for instance, by directing them to neighborhood health clinics, as Boston Medical suggests — tends to improve patient outcomes and reduce costs. Massachusetts needs to reduce its inpatient capacity more generally statewide, and Walsh’s proposals are a good start.

The closing, which would take place over the next four to five years, must be approved by the Boston Redevelopment Authority, which should give the plan a proper vetting that includes public input. In the end, though, signing off will likely be the right move for preserving quality care to Boston’s neediest residents.

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