Dear Colleagues:With the ending of hostilities in Iraq our national focus will again soon return to the domestic policies that are guiding the future of the nation and the healthcare industry. As we refocus on issues at home, it is clear that the challenges facing hospitals are growing. Government deficits are reaching new levels and legislative bodies are forced into making draconian cuts to the longstanding safety net for our society’s most vulnerable citizens.

In April, the Commonwealth of Massachusetts ended MassHealth coverage for more than 40,000 people in response to significant budget gaps in the current fiscal year. As a result, the number of uninsured has grown dramatically and placed inordinate pressure on the fragile free care pool. As the state examines new avenues to cut spending to resolve a $3 billion deficit for the coming fiscal year, Medicaid cuts are expected to impact hospitals like BWH harshly.

When you include research funding, Partners Healthcare receives 40 percent of its revenue from government sources so the implications of significant cuts in Medicaid and Medicare reimbursements are clear. At BWH alone, we estimate that the combined impact of Medicaid, Medicare and uncompensated care pool losses will result in an $18 million negative impact on our margin during this fiscal year and another $38 million in FY 2004.

Our concerns are not unique and last month I had the privilege of representing BWH at a State House event sponsored by the Massachusetts Hospital Association. Senior leaders of hospitals and healthcare networks from throughout Massachusetts rallied at the capitol to advocate for increased funding. However, the fiscal constraints are real and the fight for increased funding will likely be measured in years, not weeks or months.

As we begin the FY 2004 budget process, we recognize that the environmental challenges we face will test our resolve. We must bear in mind the direct impact of these cuts as we move forward. However, we can continue to build upon our strong legacy and rely upon the strength of our organization built over years of focused dedication to doing what is right for our patients.

Sincerely,

Andy Whittemore, MD
Chief Medical Officer