Hospitals in Mass. Feel Fiscal Squeeze
A number of factors are combining to put the financial squeeze on hospitals. Medicare, the largest single payer for most hospitals, is set to slash reimbursements by more than $5 billion nationally during this decade. Massachusetts teaching hospitals would stand to lose another $322 million in Medicare reimbursements allocated for training medical residents. At the same time, state government is rolling back payments for Medicaid, private insurers, which historically have subsidized government programs, are working to reduce their own reimbursements to hospitals under mounting pressure from businesses and government officials trying to curb annual premium increases.
Hospitals increasingly are counting on proposed changes in the way health care services are paid for, including a shift to global payments. Under global payment systems, insurers give providers annual budgets per patient, instead of reimbursing them for individual services and procedures. To prosper under a global payment system, hospitals have to manage more efficiently, eliminate unnecessary tests, and reduce the number of patients who are readmitted.
There also will be changes in the way medical care is delivered, including more specialization and referrals by doctors to less expensive community hospitals.
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