Dear Colleagues:

At a recent Partners HealthCare Senior Management Retreat, Chief Executive Officer Jim Mongan, MD, outlined many of the challenges facing hospital in the months ahead. With eroding revenues from our government payers, the prospect of meeting aggressive margin targets seems daunting.

The impact of Medicare and Medicaid cuts on the Partners HealthCare system, when combined with the effect of the loss in state support for the free care pool, is estimated to be in the range of $100 million in FY 04. That represents more than two-thirds of the system’s projected operating margin. Without relief from state cuts, negotiations with third party payers such as Blue Cross Blue Shield, Harvard Pilgrim Health Care and Tufts Health Plan will take on additional significance.

As the House of Representatives and the Senate begin negotiations on the State budget this month, the stakes are quite high. Even more troubling, these cuts in health care come at a time when malpractice insurance companies are seeking premium increases of up to 20 percent in the coming year.

As state policymakers grapple with the myriad issues of funding health care, we need your continued assistance as we continue to frame the issues that challenge our surroundings. As more and more people lose their coverage under MassHealth and coverage for acute care beyond 20 days of hospitalization is undercut by the state, our physicians must be prepared to work collaboratively to find innovative solutions.

At the heart of our success is our ability to provide exceptional care. Every day the environment challenges us to do better. Every day we are prepared to respond.

Sincerely,

Lawrence H. Cohn, MD
Chairman, BWPO