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Health reform bill needs to protect community hospitals

From world-class teaching hospitals and cancer research centers to neighborhood health clinics and community hospitals, Massachusetts' healthcare providers come in all shapes and sizes.

And just as doctors know that what works for one patient doesn't necessarily work for another, the Massachusetts Legislature must realize that regulations aimed at containing healthcare costs can't be a one-size-fits-all approach.

We agree with Representative Stephen Walsh, co-chair of the Joint Committee on Healthcare Finance, who recently said if we don't take steps now to protect our community hospitals, many of them won't be around in five to 10 years. That's not an exaggeration.

While we commend the Legislature's recognition of community hospitals as an essential tool in the health care system, we are concerned that the current payment reform legislation now in conference committee on Beacon Hill could further marginalize the state's community hospitals, forcing them to cut services or even lay off employees.

Community hospitals represent the backbone of the acute care delivery system. Community hospitals provide the majority of health care for Massachusetts residents, and are particularly vital to the most vulnerable populations: children, the poor, the critically ill, and emergency patients.


In addition, in many cases, they often meet or exceed academic medical centers in delivering care of equal quality at a significantly lower cost. In fact, as we look to the future, it is the community hospitals that will be the key to keeping health care costs under control. Each of our institutions is working hard on controlling costs and we're making progress. The recent mitigation in insurance premium increases is a testament to that effort. For many years Massachusetts community hospitals' unit costs have been among the lowest in the country.

They also play a critical role in the economic vitality of the city or town in which they're located, and are most often the largest employer in their communities, providing wages equal to or above the state average. Community hospitals directly employ over 52,000 caregivers and support personnel.


That's why while we applaud the move toward curbing health care spending, applying ambitious cost-control measures to hospitals across the board may be especially onerous for community hospitals.

For example, the legislation now calls for bringing health care spending in line with the state's overall economic growth by creating health care cost caps that are tied to the state's gross state product. But that doesn't factor in all the costs which are out of our control, like those associated with public programs like Medicaid and Medicare. We would prefer to see a system that adjusts the cap based only on medical expenses that we can possibly control.

The proposed mandates to require hospitals to move to electronic medical records and create websites that provide consumers with consumers and physicians with detailed information about medical procedure costs, are important to ensuring patient care is coordinated. We know too that down the road, EMR will allow us to deliver better care at a lower cost. But there is an expensive upfront investment that is required to get there and insufficient government funding to aid us. With already tight profit margins, and little savings to fall back on, community hospitals will need additional support to make such investments.

The Legislature can create a solution by adopting a glide path that allows community hospitals to phase in to the proposed regulations, giving us and the Commonwealth more time to create necessary capitalization plans to fund these initiatives.


We are facing a future of uncertainty where the ability to survive and thrive will belong to those of us who can navigate the rocky road ahead. All we are asking of the Legislature is to recognize the value of the community hospitals and the care and economic benefit they bring to the communities they serve. We understand that we must continue to focus on improving the quality of our care while holding down costs. What we are asking of the Legislature is to give us more time and more flexibility to adapt to the new world order that we are facing.

Michael V. Sack is president and CEO of Hallmark Health System. Kevin F. Smith is president and CEO of Winchester Hospital.