Union Hospital affected by new legislation

March 10, 2016

BY GAYLA CAWLEY

LYNN — Healthcare workers testified on Beacon Hill Tuesday in favor of pricing reforms that they say will lower the costs for community hospitals and reduce insurance premiums for consumers.

Proponents say the state’s hospital reimbursement system is unfair because large medical centers, such as Partners HealthCare, receive up to 500 percent more in payments for the same services provided by smaller hospitals, such as Union Hospital.

“It’s time we finally bring greater transparency and fairness to the financing and funding of Massachusetts hospitals,” said Tyrek D. Lee, executive vice-president of 1199SEIU United Healthcare Workers East, in a statement. “Excessive payments paid to a few hospitals creates a vicious cycle that drives down wages for community hospital workers and puts local services at risk. We need to take action now, so that we can ensure the state’s remaining community hospitals have an opportunity to survive and thrive.”

The measure, and a ballot question in November, would require private health insurers to negotiate new contracts with larger hospitals, obligating them to lower their costs and bring greater fairness to healthcare providers, according to the union and the Campaign for Fair Care, an advocacy group whose mission is to lower healthcare costs for all. They argue that the state’s present system is unfair, threatens community hospitals, drives down wages and increases costs.

Lee said the bill would provide a “level playing field,” because larger networks are able to negotiate higher insurance rates than some of the smaller hospitals. For instance, he said Union Hospital receives lower reimbursement rates than Massachusetts General Hospital.

If the legislation is approved, the union estimates that North Shore Medical Center, including Union and Salem Hospital, could receive an additional $702,455 annually in reimbursements, following renegotiations with insurance providers.

Lee said the bill is about protecting community hospitals and the services they provide. He said access to services is key, and there have been “a lot of closures and consolidations over the years due to how these community hospitals are being reimbursed.”

North Adams Regional Hospital and Quincy Medical Center are cited as hospitals that have been forced out of business.

In a letter to the Joint Committee on Health Care Financing — the panel that is considering the reforms — City Council President Dan Cahill, Councilors-at-Large Buzzy Barton and Brian LaPierre, and councilors Peter Capano, Dianna Chakoutis, Richard Colucci and Darren Cyr urged lawmakers to “strongly consider” the proposed hospital pricing system reforms outlined in the bill and ballot question.

The councilors wrote that the large, wealthy hospitals continue to demand an oversized share of medical payments, causing community hospitals to struggle for the necessary funding to maintain jobs, invest in facility upgrades and continue to provide quality care.

“In Lynn, we are seeing tangible effects of what unfair hospital compensation can do, as Partners HealthCare is moving forward in its attempt to reduce services at the only full service hospital in the city,” the councilors wrote in their letter. “Partners has filed plans to proceed with the expansion and renovation of NSMC-Salem, which includes the relocation of 48 medical/surgical beds and 38 inpatient psychiatric beds from Union Hospital in Lynn to the company’s Salem branch — effectively shuttering Union Hospital.”

But not everyone is in favor of the legislation.

Representatives from Mass Hospital Association (MHA) testified against the bill and ballot question.

“We have a diverse board that has examined the issue and has unanimously voted to oppose the ballot initiative,” said Tim Gens, executive vice-president at Mass Hospital Association, a trade group that represents hospitals statewide.

If approved by voters, the ballot initiative would require insurance companies to limit provider reimbursement to no more than 20 percent above or 10 percent below the average price for that service.

“The ballot proposal that’s been put forward by the union won’t work,” Gens said. “It creates more problems than it claims to resolve. It’s not workable. It does not align with the reform system that we’ve been developing in Massachusetts. We don’t believe that a political campaign is the best way to establish sound public policy regarding this issue.”

Rich Copp, vice-president of communications with Partners HealthCare, said Partners is aligned with MHA, and is also opposed to the ballot initiative.


Gayla Cawley can be reached at gcawley@itemlive.com. Follow her on Twitter @GaylaCawley.