Craig Melin, the CEO of Cooley Dickinson Hospital in Northampton, says, in principle, the state’s universal health care law is very much in line with the hospital’s values. But in practice, the reform is often problematic.
Unlike Holyoke Hospital, which serves a mostly low-income population, Cooley Dickinson serves a greater mix of people — both privately-insured and insured by the state’s new and old programs — so the health reform law has not been as large a financial burden on Cooley Dickinson as on hospitals considered more of a “social safety net.” (See my blog entry, A day at the Holyoke Health Center.)

What does put a burden on his hospital, Melin says, is the increasing number of Medicaid patients — those with the lowest incomes. Medicaid has always paid less for care than hospitals say it should, and now, with recent state budget cuts, it’s paying out even lower rates. At the same time, the state’s economy is leading to more unemployment and higher rates of poverty….so more people are getting Medicaid (known in this state as Mass Health.) Why is this related to health reform? Because the state decided to make the latest rate cuts in order to preserve the larger Commonwealth Care program.

Melin also says the explosion in the number of people getting either Medicaid or Commonwealth Care has created a backlog at the state level. So payments are getting held up significantly — and that puts another burden on community hospitals. Moreover, the different programs and administrators don’t always talk to each other….or know the other one’s rules … creating even greater havoc for hospital accountants and consumers.
Another way a bad economy puts strain on a hospital like Cooley Dickinson is through the shrinking “voluntary” patient population. Fewer people are getting elective surgeries or non-essential tests and procedures, because of the costs involved. But Cooley Dickinson was counting on that population to grow, because when rates for individual procedures go down, you need volume to go up! And he says it is this phenomenon — rather than the health reform law — that led Cooley Dickinson to lay off staff in recent months.

Meanwhile, Melin was quite frank about the need for a different kind of health reform — mostly around the way payments are doled out. He is very much in favor of an arrangement that would reward hospitals, primary care doctors, and community clinics who keep patients HEALTHY. That way, hospitals like his wouldn’t be under pressure to use so many high-tech procedures to keep the higher reimbursements coming in. Instead, they could look at community health more holistically, and with a much more preventative approach. (He says Cooley Dickinson has already been doing this by supporting community health and education programs — with virtually no financial return.)

Interestingly, the next day, the local media announced a deal between Blue Cross and a Western Mass medical practice to do just what Melin suggested. It’s called the Alternative Quality Contract. I’ll have to follow up on that….

Near the end of our conversation, I got the distinct impression that Melin is quite frustrated with the status quo (re: fee-for-service from private and public insurers) and the incredible administrative burdens placed on hospitals to survive in the current health care system — with or without Chapter 58. I asked him if he would instead prefer a single-payer system. Yes, he would. That’s not to say that he believes it’s an easy political path to take, but I find his take on it — from a community hospital perspective — to be telling.