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MASSACHUSETTS SHOULD PRESERVE
EACH HOSPITAL NEEDED TO PROTECT THE HEALTH OF OUR PEOPLE
Alan Sager, Ph.D. and Deborah Socolar, M.P.H.
Directors, Health Reform Program
Boston University School of Public Health
715 Albany Street, Boston, Massachusetts 02118
phone 617.638.5042
fax 617.638.5374
asager@bu.edu, dsocolar@bu.edu
http://dcc2.bumc.bu.edu/hs/accessandaffordability.htm
Testimony to the Joint Committee on Health Care Massachusetts General
Court, Oversight Hearing, Tuesday 5 February 2001 at 10 A.M., Room
A-1
Disclaimer: As always, we write and speak only for ourselves,
not on behalf of Boston University or any of its components.
INTRODUCTION
We urge careful and immediate state action to conserve all remaining
acute hospitals and beds in Massachusetts. Unless this is done,
more hospitals and emergency rooms will close. The results will
be increased emergency room diversions, shortages of beds, and skyrocketing
costs. As one public official said last year, "Lives are really
at risk."
State government must act to protect all needed hospitals because
no free market is available to do the job. The alternative to state
government action is growing hospital anarchy. Many needed hospitals
will close. A few needed but vulnerable hospitals can be saved,
like Everett's Whidden Hospital, by a Cambridge Health Alliance
riding to the rescue. Still other needed hospitals will conclude
that they must cut needed but money-losing services or must sell
themselves to for-profit chains as the price of survival—though
these steps will often fail to save the hospital.
Waltham Hospital's fight for survival has galvanized long-needed
concern and attention. Waltham Hospital should be kept open—and
so should each surviving Massachusetts hospital—unless it
can be proven that it is not needed. We hope that Waltham Hospital
can be rescued, even at the last minute. But we ask that state government
get ahead of the curve by anticipating hospital crises and preparing
effective and measured responses. Being prepared saves money, saves
hospitals, and saves lives.
State government is financially, politically, and administratively
competent to protect needed hospitals at the lowest possible cost.
Decades ago, when some people thought that closing hospitals would
save money, state government lacked the capacity and the political
will to do the job. So state government unleashed competition on
our hospitals. Competition has proved effective at closing hospitals.
Unfortunately, it can close needed hospitals. And, like the Mickey
Mouse – Sorcerer's Apprentice in Fantasia, it is not able
to stop. While state government found it hard to close hospitals,
it has the capacity and can find the political will to stabilize
each needed hospital.
For too long, state government has acted as if Massachusetts has
too many hospitals.
For too long, state government has acted as if a competitive free
market for hospital care existed and was competent to pick which
hospitals should survive and which should close.
For too long, state government has failed develop an early warning
system to identify which hospitals might experience financial distress,
so that the state might move to intervene in a timely manner.
For too long, state government has failed to identify which hospitals
are needed to protect the health of the public, so that state government
might know which hospitals to protect.
For too long, state government has given hospitals across-the-board
spending increases, leaving too little money for the targeted aid
that is vital to protecting all needed hospitals.
It is time to do better.
A. SPECIFIC RECOMMENDATIONS FOR ACTION
1. With one-half of Massachusetts hospitals closed in the past 40
years, with growing ER gridlock, and with a looming shortage of
staffed acute care beds, state government should declare that each
surviving acute care hospital is needed to protect the health of
the people unless proven otherwise. The burden of proof should be
on those who would allow another closing, not on those who would
protect their hospital.
2. The commissioner of Public Health should publicly state that
the loss of a needed hospital or emergency room would threaten lives
and therefore would constitute a public health emergency, and the
governor should declare that a threatened hospital or ER closing
constitutes a public health emergency. This would allow state government
to act quickly to stabilize any such hospital until a hospital receivership
statute is enacted. Steps 1 and 2 constitute the emergency response
to the crisis of hospital closings.
3. State government should immediately enact and enforce a hospital
receivership law. That law should empower responsible public officials
to petition a court to appoint a receiver to stabilize, conserve,
and revive each needed but endangered hospital.
4. The receivership law should be accompanied by emergency financial
and managerial assistance. That assistance should be financed through
a) A dedicated trust fund, whose revenue would be generated by a
one-quarter of one percent assessment on acute hospital total revenue
statewide. With that revenue likely to equal approximately $12 billion
in hospital fiscal year 2002, some $30 million would be raised.
b) Direct state appropriations required to stabilize, conserve,
and revive each needed but endangered hospital.
5. To collect the evidence needed to carry out these tasks, the
Division of Health Care Finance and Policy, with the support of
the Department of Public Health, when appropriate, should be charged
with:
a) Identifying any surviving hospitals that are not now needed,
and are not expected to be needed, to protect the health of the
public;
b) Measuring the revenue needed to finance efficient and high-quality
care at each hospital; and
c) Designing an efficient, fair, straightforward, and effective
method of regulating hospital revenue in Massachusetts. Available
evidence from the state of Maryland should be closely considered.
Several of these steps are incorporated in existing legislation,
H. 611 and H. 3541. Originally drafted as preventive measures in
1993, and re-introduced regularly since then, these bills would
benefit from a some updating and modernization in light of need
for speedy responses to the growing emergency facing hospital survival.
Further, state laws adopted in the 1980s have explicitly encouraged
hospital closings and bed reductions. For example, some "automatic
bed delicensing" is required if occupancy rates drop below specified
levels. Since empty beds are not staffed, and because the cost of
building them is a fixed or sunk cost, they generate at most tiny
incremental costs. And since there appears to be scarce bed capacity
to accommodate either emergency surges in inpatient volume or the
gradual increases in volume associated with a growing older population,
this statutory provision should be replaced by language calling
for the mothballing of reserve hospital capacity. Steps 3, 4, and
5 constitute the short-term response to the crisis of hospital closings.
6. State government should prepare to reintroduce hospital rate
setting within the next two years. After so many closings, this
is essential to put a floor under the revenue of hospitals with
weak bargaining power. And because hospital closings and mergers
have resulted in regional oligopolies and monopolies, rate setting
is essential to put a ceiling on the revenue of hospitals with strong
bargaining power. Finally, rate setting is essential to provide
each needed hospital with enough revenue not only to survive but
also to deliver high-quality care, so long as that hospital is operated
efficiently operated. Step 6 constitutes the middle-term response
to the problem of hospital closings.
B. SUPPORTING EVIDENCE
1. Survival: Targeted state action is essential to protect needed
hospitals
Without a competitive market we can trust, only public action can
stabilize needed hospitals.
But Massachusetts state government currently lacks the tools to
identify which hospitals are needed and to stabilize each needed
hospital. The process established by chapter 141 of the Acts of
2000 provides a 90-day notice and for a public hearing, but it does
not provide for state authority or money. Further, the hearing's
mandated focus appears to be not on whether the hospital should
be preserved—and how it should be preserved—but on identifying
alternative sources of care—apparently assuming that the hospital
will close.
State government must determine which hospitals and which emergency
rooms are needed to protect the health of the public. State government
still does not know how many beds are set up and staffed currently,
and we don't know how many beds could be made available in 24 hours,
48 hours, or one week—in the event of a large-scale emergency.
State government must then develop practical steps to stabilize,
conserve, and revive each needed hospital. Recognizing that state
dollars are scarce, one essential tactic should be to target state
money toward needed hospitals that are in danger of closing.
Only targeted support can stabilize each needed but endangered hospital.
Targeted support is efficient, providing money where it is most
needed. It is the lowest-cost method of saving all needed hospitals.
When state government plans to pay more money to hospitals, it should
carefully monitor where its money would go. When state government
increases Medicaid payments across-the-board to all hospitals or
when it increases state payments to the free care pool, does the
state know how much money goes to which hospitals—and whether
these are the hospitals that most need more state money in order
to survive and to delivery high-quality care? Generally, state government
does not identify how much money goes to each hospital.
One reason for this state failure is that the Hospital Association
has been urging across-the-board increases in Medicaid payments
and state assumption of free care pool costs as ways to address
the problems of hospital closings and emergency room gridlock. After
long ignoring and even justifying hospital closings, the Hospital
Association appears to have used them—and emergency room gridlock—as
pretexts for across-the-board payment increases. Unfortunately,
the state money demanded and won by the Hospital Association is
not well-targeted. A great deal of it goes to hospitals that are
in relatively good financial condition—which may be many of
the hospitals with the most powerful voices within the Association.
The Hospital Association insists that Medicaid is not a grant program.
But nor is it a program that simply reimburses whatever costs hospitals
incur.
Across-the-board financial aid to Massachusetts hospitals, such
as increases in Medicaid rates, are very inefficient. Too much of
the money goes to hospitals that are in relatively good financial
shape. Across-the-board payment increases do very little to protect
endangered hospitals. They do very little to keep needed emergency
rooms open.
a) Across-the-board Medicaid rate increases help the more prosperous
hospitals
- A 10 percent ($60 million) across-the-board
hike in Medicaid rates in hospital fiscal year would have done
very little to help financially distressed hospitals.
- Fully $30 million would have gone to the 20
most prosperous hospitals in the state, raising their surpluses
by about 15 percent.
- The other $30 million would have gone to the
remaining 51 hospitals, lowering their overall deficits by about
25 percent—and leaving them with deficits totaling $90 million.
b) Hospitals that close their emergency rooms more often are in better
financial shape.
- In Eastern Massachusetts, twelve hospitals with
surpluses in hospital fiscal year 1999 averaged 278 hours on diversion
between January and October of 2000.
- But nine hospitals with deficits averaged only
74 hours on diversion during those ten months.
c) Across-the-board Medicaid rate hikes are unfair to hospitals themselves.
- Hospitals now vary enormously in the share of
their costs paid by Medicaid, according to data developed by the
Lewin Group, so across-the-board hikes perpetuate this unfairness.
d) No one who lives, works, or does business in Massachusetts can
afford more money for business as usual in health care.
While more money for business as usual is the first choice of hospitals,
doctors, and drug companies everywhere, it is not sustainable. Massachusetts
must seek ways to cover all residents and protect high-quality care
without increasing health spending faster than growth in the overall
state economy.
After targeted support has stabilized all needed hospitals, state
government should turn its attention to a durable method of paying
each needed hospital fairly. The hospital market is not free and competitive,
so Massachusetts cannot trust it to pay hospitals fairly. Today, powerful
hospitals extract large rate hikes from HMOs and other private payors.
Weak hospitals are not able to garner enough revenue.
In the absence of a free market, state action is essential—and
it is clearly feasible. For 25 years, Maryland has used all-payor
rate setting to provide fair revenue to each needed hospital. Rate
setting puts a ceiling on the revenue of powerful hospitals and a
floor under the revenue of weaker hospitals. All hospitals face pressures
to contain cost under this arrangement, because revenue is keyed to
the cost of efficient operation.
2. Access
a) "We can't afford to lose another hospital."
- Public Health Commissioner Koh has said that
"we cannot afford to lose another hospital."
b) ER gridlock
- In recent years, the evidence on growing emergency
room diversions and gridlock have aroused widespread concern in
Massachusetts and elsewhere. Between 2000 and 2001, ER diversions
doubled in greater Boston.
- Each hospital closing increases the severity
of the ER diversion problem. And many surviving hospitals and
ERs are vulnerable. In the northeastern corner of the state, for
example, three of the remaining four ERs—at Addison Gilbert
in Gloucester, at Hale/Merrimack Valley in Haverhill, and at Cable
in Ipswich—are at risk of closing within the next one-two
years.
- One of the main causes of ER diversions seems
to be a shortage of staffed inpatient beds. Indeed, the shortage
of staffed inpatient hospital beds, including ICU beds, while
more subtle than the problem of ER diversions, is at least as
serious.
- Hospital closings reduce access to emergency
room services. They raise the risk of ambulance diversions. They
increase travel time and waiting time for ER patients.
c) Half of hospitals lost in four decades
- If Waltham Hospital is allowed to close, Massachusetts
will have 72 acute hospitals, 48.9 percent fewer than in 1960.
- The rate of closings has accelerated. Twelve
percent of the hospitals open in 1980 closed by the end of that
decade. But 23 percent of hospitals open in 1990 closed by 2000.
- We project a loss of 13 more hospitals by the
year 2010 if state government fails to act to identify and stabilize
each needed hospital.
- Clearly, fewer hospitals means less competition
among surviving hospitals, and greater upward pressure on hospital
prices, other things equal.
- Fully 26 acute care hospitals have closed since
1988, when hospital revenue was effectively deregulated by chapter
23 of the Acts of 1988 (chapter 495 of the Acts of 1991 completed
the job).
- None of those that closed was a major teaching
hospital. Some had quality problems, but these could have been
remedied, given the huge supply of competent physicians, nurses,
administrators, and other health care workers in the Commonwealth.
- Hospitals located in lower-income Massachusetts
communities have been more likely to close. Hospital closings
are particularly harmful to lower-income citizens, since they
tend to suffer more unmet health care needs.
d) Half of all beds lost in two decades
The recent drop in the number of acute care beds in Massachusetts
was much more dramatic than the drop in the number of hospitals. From
a high of 24,327 in 1980, beds fell to about 13,000 beds in 2000,
we estimate— a drop of 47.2 percent in only two decades.
e) A looming bed shortage
Despite the rapid closing of hospital beds, and the rising need for
hospital care, almost public no attention was paid to the looming
shortage of hospital bed capacity until recently. Much of the recent
discussion has taken place in the context of the shortage of nurses
willing to work in hospitals.
The rising need for hospital care owing to an aging population will
not occur suddenly on the day in 2011 that the first baby boomers
hit age 65. Rather, it will take place gradually as more of the baby
boomers pass ages 50, 55, 60, and 65—the ages at which rates
of use of the hospital increase more rapidly year-by-year. For example,
hospital use by Americans aged 45 to 64 is nearly double that for
people aged 15 to 44. And baby boomers have certainly begun to age
past 45. Further, use rates multiply by an additional 2.5 times among
people aged 65 to 74.
- Almost three years ago, we projected that the
state's supply of beds set up and staffed will soon fall substantially
below the need. A conservative measure shows shortfalls of 1,650
beds (12%) by the year 2005 and 4,009 beds (25%) in 2025. Under
a more adequate use rate, the projected shortfall is 5,563 beds
(32%) in 2005 and 9,418 beds in 2025 (44%).
- Even if the drop in Massachusetts hospital capacity
slows, and then stops entirely by 2005, the shortage of beds will
continue to grow because the need for beds is growing.
- We hope that these huge shortfalls will not
actually materialize. We expect some patients will be denied needed
services, some hospitals will become crowded (as has occurred
recently), and some hospital capacity will be taken out of mothballs.
Exhibit of Projected Available Beds versus Projected
Needed Beds, 1995 - 2025 to be insert into this web page shortly.
The results raised a number of concerns. As displayed in the exhibit
and in the chart, after about the year 2000, we found that the number
of projected beds in Massachusetts fell substantially below the
projected need for beds even by the conservative measure of the
national 1996 bed use rate—and even assuming that no more
beds are lost after 2005.
The experience of the past two years, with hospitals at capacity
at many times and in many places, and with patients backing up in
some emergency rooms owing to a lack of inpatient beds on nursing
units, suggests that the state did suffer some degree of shortfall,
as projected for the year 2000.
We expect at least three responses to the looming shortages in hospital
bed capacity. Two of these could mean substantial harm to patients.
The third could result in higher costs unless the state prepares.
First, some patients who could use hospital care will be denied
needed services. A form of bed rationing will prevail. Patients
denied care owing to lack of beds will suffer.
Second, as we have seen since several years ago, some Massachusetts
hospitals are becoming over-crowded, especially but not exclusively
in the winter.
Instances of running out of hospital capacity have become increasingly
visible, nationally and in Massachusetts. As a worse-than-usual
flu season hit several states in December 1997 and early 1998, serious
shortages arose where hospital capacity—numbers of hospitals,
emergency rooms, and beds, as well as staffing—had been cut
sharply in recent years. In much of California, central Florida,
and other states, hospitals struggled to care for the flood of patients
and sometimes resorted to risky stop-gap measures. For example:
- Hospitals in several parts of California were
putting patients needing beds into doctors' offices, hallways,
outpatient areas; using waiting rooms as treatment areas; using
a tent in a parking lot as a family waiting area; and limiting
elective outpatient care.
- Emergency rooms that are closing their doors
to ambulances have been a growing problem across the nation for
several years – sometimes diverting patients as far as 30
miles away.
Thus, a flu upswing was the straw that broke the
camel's back several years ago in many California communities, and
elsewhere. A California hospital industry official acknowledged,
"There's no fat in the system to deal with [influenza patients]
when this occurs."
But in Massachusetts, the upsurge in ambulance diversions of the
past two years has occurred without a particularly severe flu season.
And one of the sad lessons understood more widely after this fall's
attacks is that, in many areas, the nation's hospitals lack the
capacity to accommodate the surge in demand that might arise with
a calamitous plane crash, fire, or epidemic.
Some observers have complained that high costs would result from
maintaining standby hospital capacity to deal with times of high
need. But once beds are built, no further fixed costs are associated
with them. The only costs would be those to prepare beds for use
and to staff them. These are legitimate variable costs that should
be shouldered to provide necessary care.
So, third, another possible response to the collision between growing
need and shrinking bed supply is that that some hospital capacity
will be taken out of mothballs and more nurses will be hired to
staff those beds. Taking capacity out of mothballs will be relatively
inexpensive if hospitals maintain beds under license and if hospitals
plan methods of preparing needed beds for use. It will be much more
expensive to increase bed capacity if extensive rehabilitation must
be performed to bring previously delicensed beds up to today's codes.
It will be even more costly still if closed hospitals or closed
units must be rebuilt—as has been the case with many public
schools throughout the nation.
Hiring adequate numbers of nurses will require a hard look at the
causes of the recent nursing shortage. To what extent is it attributable
to changed working conditions in hospitals, to the difficulty of
caring for patients who are substantially more ill, to salaries,
and to other factors?
f) Conserving hospital beds that will be needed sooner or later
- Use of hospital beds will rise owing to the
greater needs of an aging population, and out of recognition that
artificially high prices have held down use of hospital care even
when it is less costly than alternatives.
- Use of hospital care today is artificially depressed
because many prices for hospital care are set well above actual
cost. This market failure leaves hospitals under-used for diagnosis,
recuperation, and general care. And the average cost of care per
day for remaining patients keeps rising, pushing even more patients
out of hospitals.
- Restoring capacity will be relatively inexpensive
if hospitals maintain beds under license and plan for their re-activation.
It will be much costlier if it requires extensive rehabilitation
to bring delicensed beds up to today's codes— or if closed
hospitals or units must be rebuilt, as has been the case with
many public schools nationwide.
- Cities and towns throughout the Commonwealth—and
indeed throughout the nation—have had to spend a great deal
of money to secure an adequate number of public school classrooms.
During the 1970s and 1980s, many public schools were sold off
or redeveloped as senior centers, condominia, and the like. School
boards seemed to assume that lower birth rates would prevail indefinitely,
just as some health care experts seem to assume today that need
for hospital care will drop indefinitely. During the 1990s, many
school systems have scrambled to replace the lost capacity by
buying portable classrooms, and by acquiring land and building
schools to replace those that had been lost.
- To avoid that dynamic in hospital care, beds
removed from service should be moth-balled, and maintained under
license. This would be hard to do if entire hospitals close. The
provision of chapter 23 of the Acts of 1988 calling for automatic
de-licensing of beds when occupancy rates fall below a certain
level should be repealed.
g) Hospitals are not interchangeable parts in a health care machine
Hospitals, doctors, and patients form complex relationships with
one another. These relationships tend not to be of a mechanical
nature. Losing a hospital can therefore disrupt patients' long-standing
and therapeutic relations with their caregivers.
Losing a hospital also disrupts internal working relationships within
the institution.
3. Cost
- Massachusetts hospitals' cost per person in 2000
was 38.6 percent above the U.S. average. Massachusetts hospital
spending per person was $1,755.90—highest in the nation—compared
with the U.S. average of $1,267.00.
- If we spent at the national average, we would
have saved $3.1 billion in hospital fiscal year 2000 alone.
- Hospital closings, long touted as a method of
saving money, have failed to reduce Massachusetts hospital costs
relative to the national averages. Massachusetts acute hospital
beds per 1,000 residents dropped from five percent above the national
average to eleven percent below the national average between 1984
and 2000, yet our hospital costs per person in both years were
38 percent above the national average.
Exhibit of Hospital Beds per 1,000 People and Hospital Costs
per Person, Massachusetts and U.S.A., 1984 and 2000 to be insert
into this web page shortly.
- It is clear that while many hospitals and beds
have been closed in Massachusetts, hospital costs here have remained
high. But excess capacity cannot explain our state's higher than
average costs because our capacity is now below the national average.
And closing hospitals and cutting beds are not effective remedies
for these high costs.
- Some consultants to the hospital industry and
others have tried to explain away the $3.1 billion excess costs
of Massachusetts hospital care in 2000.
- But there is a big difference between statistical
explanations of high costs and concluding that those high costs
are affordable and appropriate in the real world.
- Recognizing the high costs associated with the
steady drift of hospital care into teaching hospitals, the majority
report to the Massachusetts Health Care Task Force strongly recommended
directing more hospital care to lower-cost hospitals. But unless
lower-cost hospitals are kept open, it will not be possible to
direct any care to them. The Finance Working Group has said that
no additional community hospitals should close.
- Each hospital closed since 1988 has been a community
hospital.
- Massachusetts leads the nation in the share
of our inpatients served in costly teaching hospitals.
- As has been found with public schools, the cost
of building new hospitals is much greater than cost of retaining
a reasonably modern hospital. The current estimated low-side capital
cost of opening a new hospital of 200 beds is $100 million, or
$500,000 per bed. This can be expected to continue to rise substantially.
4. Market failure
Most Americans prefer to rely on a free market to solve problems whenever
possible. But a free market is not always present. Hospital care is
one of the areas in which the main foundations for a trustworthy competitive
free market have been eroded by mergers and closings, by the lack
of effective price competition, and by the high barriers to entry
into the hospital market. A number of pieces of evidence support this
contention.
In a free market, the more efficient hospitals—those with lower
costs—would be more likely to remain open. Unfortunately, there
is no evidence that the more efficient hospitals are more likely to
survive.
Our studies of hospital closings in 51 cities nationally going back
to the mid-1930s show that lower-cost hospitals have been more likely
to close. Indeed, for the decades of the 1980s and 1990s, when more
accurate data on hospital efficiency have been available, the more
efficient hospitals have been more likely to close. That is, the hospitals
that closed had lower costs—measured by average cost per discharge,
controlling for case mix—than the hospitals that remained open.
The larger teaching hospitals and those with more money in the bank
and in investments have been more likely to remain open. This is clearly
not a case of a free market survival of the fittest; it may well be
a case of survival of the fattest.
Use of hospital care in Massachusetts has been artificially depressed
by the methods hospitals employ to set prices and by the pricing negotiated
between hospitals and many payors. In many instances, hospital prices
have been set artificially at levels well above actual cost—for
example, charging an average daily price for hospital inpatients means
that low-cost recuperative days are extremely over-priced. (The reasons
for doing this include convenience, custom, and payors' preferences.)
Payors and clinicians who make care decisions with an eye to price
will ignore actual cost because it is not relevant as far as they
are concerned. The result is that hospital beds are under-used for
purposes of diagnosis, recuperation, and general care.
Further, the less expensive patients and patient-days of care are
removed from the hospital. But with fewer patients to cover the hospital's
fixed costs, the average cost of care per day for the remaining patients
rises. The price is increased to cover these costs. Higher prices
spur insurors to remove still more patients from the hospital. And
price rises still higher.
But when patients are removed from the hospital, where do they go?
What care do they receive? In some instances, they are served in different
settings, such as sub-acute facilities, home care, or even observation
beds in the hospital. Real costs are re-packaged but they are not
reduced.
The frequent failure of hospitals' prices to match cost is not an
esoteric matter of accounting. It is one of several causes of widespread
market failure in hospital care. Free markets function well only when
prices correspond to costs. This failure prevents markets from functioning
well.
State policy is still relying on price competition as the driving
force in holding down hospital costs. But without competitors, there
is no competition. The amount of price competition among hospitals
has dropped substantially in many parts of the state—such as
Fall River/New Bedford/Wareham, Cape Cod, the Connecticut River valley,
Berkshire County, Worcester County, Essex County, and greater Boston.
Owing to closings and mergers, surviving Massachusetts hospitals enjoy
increasing bargaining power against HMOs, insurance companies, and
other private payors. The result will be more revenue to surviving
hospitals and higher costs to all who live, work, or do business in
Massachusetts.
The high cost of building a new hospital, and the regulatory barriers
to entering the hospital market, will make it hard to build new hospitals
that could compete by offering lower prices. And it is clear that
no functioning free market exists in hospital care—one that
can be trusted to hold down costs, to keep open efficient hospitals,
to assure an adequate supply of hospital beds for the long haul—or
even to protect the emergency rooms we all need.
When economics fails—when the free market fails—the choice
is between anarchy and careful government action.
Some will say that governmental action means politics. They are right.
A greater government role means more politics. That is no longer an
option. The real choice is between good politics that protects high-quality
care at all needed hospitals at the lowest possible cost, and bad
politics that makes irresponsible decisions. Given the importance
of our health care, and the enormous reservoirs of competence in our
state, our legislators and public officials can and must make good
political decisions.
Two years and one month ago, Massachusetts state government used a
new receivership law to help preserve Harvard Pilgrim Health Care.
That was an important demonstration that state government can act
constructively and successfully in health care.
Preserving hospitals—actual caregivers—may be even more
vital than preserving insurors, the organizations that move money
in health care. And indeed, state government provided financial assistance
to help preserve Quincy Hospital a few months before its involvement
with Harvard-Pilgrim.
But many other needed hospitals have closed. And many more will close
in the years ahead without stabilization, reform, and adequate financing.
Some observers may imagine that losing a hospital affects only a few
communities. They are wrong. Our state has lost so many hospitals
that each additional closing will shake many other hospitals, communities,
and regions with ER diversions and bed shortages.
Each potential loss of a hospital must now be everyone's concern.
Action delayed until a hospital is on the verge of closing will be
too little and too late. So state government should declare that all
surviving hospitals are needed unless proven otherwise. It should
act to protect each needed hospital. And it should act now, before
more hospitals and more health care slip over the edge.
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