Pandemic ravages community hospital finances

Twenty people lost their jobs this week at Lawrence General Hospital, as the hospital slashed its staffing budget by $6 million and eliminated 56 positions, though many were vacant. Hospital CEO Deborah Wilson warned that service cuts will be next.

With the hospital facing a $20 million deficit in 2021, on top of a $13 million loss last year, Wilson said in an interview, “We can’t cut our way out of this situation.”

For years, community hospitals have complained about low reimbursement rates that put them at a financial disadvantage compared to more well-funded academic and teaching hospitals. Now, some of these same hospitals have been ravaged by the COVID-19 pandemic. Hospital officials hope the pandemic will be a catalyst to make the structural changes that lawmakers have tried for years to accomplish without success.

“There’s no more time for thinking about it, looking forward to future years as to whether or not there can be a remedy for this unfair reimbursement situation,” Wilson said. “The time is now.”

Both the House and the Senate passed plans to help community hospitals in 2018. But the two bodies took vastly different approaches and could not reconcile their differences. The House took another stab at adding an infusion of cash into community hospitals in 2020, but the proposal did not make it into the final bill.

Across the board, hospitals generally lost money during the COVID-19 pandemic, as they stopped performing elective procedures and saw fewer patients for non-emergency care. A lot of that revenue was made up by federal stimulus money. But the Center for Health Policy and Analysis found that the impact was uneven, with community hospitals showing the least profitability.

Lawrence General Hospital is the perfect example. Generally, MassHealth reimburses hospitals at a lower rate than the cost of care, so hospitals lose money on MassHealth patients and make it up from patients with commercial insurance. But in the low-income community that Lawrence hospital serves, 30 percent of its patient revenue comes from MassHealth, compared to 18 percent at the average Massachusetts hospital. In addition, the rates paid by commercial insurance are negotiated and are often higher in large hospital systems. Lawrence General Hospital gets some of the lowest commercial reimbursement rates in the state.

So the hospital was already financially weak pre-pandemic. With Lawrence becoming an epicenter of the pandemic, Wilson said, the hospital lost many of its non-COVID patients, while facing enormous expenses for setting up COVID testing services and caring for sick COVID patients. It lost money despite getting federal CARES Act funding last year.

State Sen. Barry Finegold, an Andover Democrat, delivered an impassioned speech during the Senate budget debate this week using Lawrence General’s situation as the impetus for urging lawmakers to provide immediate short-term funding for community hospitals and long-term structural reforms. Finegold said the disparity in commercial payer rates in minority communities like Lawrence “is a manifestation of systemic racism” in the insurance industry. He called it “modern-day redlining,” referring to racist banking practices that began in the 1930s of granting housing loans only in white neighborhoods.

Finegold proposed one budget amendment that would require insurers to reimburse community hospitals at the statewide average price for a procedure. Another amendment would have established a $100 million health equity fund to support healthcare in Gateway Cities.

Finegold withdrew both amendments, but said he will continue to advocate for the use of federal American Rescue Plan funds to shore up community hospitals.

Senate Ways and Means chair Michael Rodrigues, responding to Finegold, according to a State House News Service transcript, pledged that he would look to the American Rescue Plan funds to help community hospitals. “We will absolutely look very, very closely at not just his hospital but at all community hospitals, safety net hospitals, in Gateway Cities around the state to ensure we help them in any way possible by providing them with much needed cash to sure them up and make sure they do not leave us or be forced to close,” Rodrigues said.

SHIRA SCHOENBERG

FROM COMMONWEALTH

White loses appeal: Boston Police Commissioner Dennis White appears to have run out of legal options to prevent his firing, as a single justice of the Appeals Court rejected his appeal. Acting Boston Mayor Kim Janey can now hold a hearing on White’s suitability for the job and then sack him, presumably because of allegations that he abused his wife and niece decades ago. White is now pushing for a full-blown judicial-type hearing with city leaders.

  • In a letter to city officials, White’s attorney requested a public hearing instead of a meeting with Janey. He apparently wants to present evidence and witnesses as to why he should hold on to his job. He also wants the name of the person or persons “making these false allegations against him,” a reference to unnamed witnesses cited an investigator’s report released earlier this month.

Read more.

Glimmer of good news: Mayflower Wind said it plans to bring ashore electricity from its next wind farm at Brayton Point in Somerset. That’s good news for the struggling community, but unfortunately nothing is guaranteed. Mayflower has to win another procurement from the state and its wind farm would have to go through a federal permitting process. It could take three to five years before Somerset sees the long hoped-for bump from the offshore wind industry that the town has been counting on ever since its coal-fired power plant shut down in 2017.

  • Mayflower seems determined not to make the same mistakes as Commercial Development Inc., the brownfields developer that tore down the old coal power plant and had no backup when the Trump administration slow-walked offshore wind projects through the regulatory process. To cover some of its costs, Commercial Development rented part of the property to scrap metal and road salt operations, a move that unleashed dust, noice, and truck traffic on the surrounding community.
  • Kathy Souza, who has helped lead the fight against Commercial Development, received calls from Mayflower executives who promised transparency and cooperation. “They promised to be honest and upfront. That’s positive,” said Souza.

Read more.

Senate passes spending plan: What was interesting about the vote was that it was unanimous. After three days of deliberation, the Senate voted 40-0 in favor of the budget. The Senate plan has some philosophical differences with the House’s budget — on the film tax credit and higher fees on Uber and Lyft rides, for example. But the biggest question mark as the two branches try to iron out their differences is how much money is sloshing around Beacon Hill, including funds from stronger-than-expected state revenues and billions in federal aid. As they say, differences are easier to work out when there’s a lot of money to go around. Read more.

OPINION

5 principles for Boston’s waterfront: Kathy Abbott of Boston Harbor Now and Vikki Spruill of the New England Aquarium outline five priorities as the city strives to maximize its shoreline, prioritize climate resiliency, and increase accessibility. Read more.

FROM AROUND THE WEB

 

BEACON HILL

Dr. Monica Bharel is stepping down as commissioner of the Department of Public Health. (WBUR)

Weekly figures released on new unemployment claims in the state may not be accurate, but in trying to find out why, Globe reporter Sean Murphy has come up against the say-nothing approach to inquiries from the state agency that oversees the system, which would not provide an explanation for what’s going on. (Boston Globe

Business groups are urging state officials to use some of the big pot of federal relief aid to offset big increases they’ve faced in unemployment insurance costs. (Boston Globe)

BUSINESS/ECONOMY

Bars and nightclubs prepare to reopen, starting this Saturday, for the first time in 14 months as COVID restrictions are lifted. (Eagle-Tribune)

EDUCATION

State education officials say all COVID-19-related education restrictions will be lifted next fall, and all schools are expected to meet fully in person. (MassLive)

Boston school superintendent Brenda Cassellius says the district is expanding its investigation of a long-time contractor who carried out a controversial type of group counseling with students. (Boston Globe)

ARTS/CULTURE

Tourism officials are optimistic that visitors will return to businesses, recreational, and cultural sites in Massachusetts now that COVID restrictions are lifting – but it may take time. (Gloucester Daily Times)

A new owner has big plans for the Lizzie Borden Bed & Breakfast Museum in Fall River. (Herald News

TRANSPORTATION

Boston city councilor and mayoral candidate Michelle Wu calls on the state to rebuild a reconfigured section of the Massachusetts Turnpike in Allston at grade level. (Boston Herald)

ENERGY/ENVIRONMENT

The New York Times looks at what it would take for the country to build out its wind and solar power capacity enough to achieve the goal of “net-zero” carbon emissions by 2050. 

CRIMINAL JUSTICE/COURTS

Suffolk County District Attorney Rachael Rollins said her office has warrants for 40 to 50 people believed to be driving gang violence in Boston, with police planning sweeps to make arrests in the coming days. (Boston Herald

Gordon College is considering an appeal to the US Supreme Court of an SJC ruling which found that a professor at the Christian college is protected by anti-discrimination laws and is not covered by a ministerial exemption. (Salem News)

State Auditor Suzanne Bump and her Quincy-based substance abuse company are being sued for sexual harassment, violations of the state’s COVID-19 workplace protocols, and large gender-based pay and benefits inequities. (Patriot Ledger)

PASSINGS

Restaurateur and businessman Andy Yee of South Hadley, whose family owns numerous Western Massachusetts restaurants through Bean’s Restaurant Group, dies at 59. (MassLive)