Boston Business Journal - June 4-10, 2004 Volume 24, Number 18

State is comfortably numb to health care woes

A brave friend once taught me that overcoming denial is the first step to recovery. Most former addicts will attest to this. Denial is a powerful psychological defense that permits us to avoid dealing with harsh reality.
Unfortunately Massachusetts is in denial about the financial pressure on its hospitals, but the consequences are becoming so overwhelming they can no longer be ignored.
Our health care system cannot continue on its present path. Most Massachusetts hospitals are so financially strapped that they are borrowing from the future to cover current costs.
Given the outlook of greater patient demand, less financing and aging infrastructure, the business of operating hospitals may soon be unable to support the mission of health care. The consequence will be a two-tier health care system, one in which the first diagnostic test performed on patients may be a check of their wallet size.
Yet much of Massachusetts remains comfortably numb to this situation. Consumers have grown accustomed to the abundance of care that is widely and indiscriminately available. We revel in our stature as the nation’s principal center for health care excellence.
Boston indeed leads the nation for its health care resources and reputation. It has the second-highest concentration of hospitals and ranks No. 1 for its dependence on health care as an economic driver. Not only does new England have the largest health care employment base, but access to the best of the best health care is a primary draw for residents and visitors alike.
Yet our hospitals are plagued by systemic financial problems, and their condition is acute. Massachusetts is among the top five states with the greatest proportion of hospitals under severe financial strain—not profitable, not liquid and laden with debt. The numbers paint a bleak picture for their ability to meet future capacity needs.
Already over the past 20 years, specialty services have been cut, one-third of Massachusetts’ hospitals have closed and one-half of its beds have been lost. Of the remaining hospitals, half are operating in the red and a dozen are barely clinging to life.
Beginning in seven short years, baby boomers will begin turning 65; 20 years from now one out of ever four citizens in the commonwealth will be over 65 years old. They will use seven times more health care than the average 25-year-old, because eight in 10 will have at least one costly and chronic condition to treat.
What happens when you or a loved one arrives at the nearest hospital to find there is no room, nurses or the clinical expertise you need? You may be diverted to a hospital 60 miles from your home. You may spend up to two years waiting for surgery. It is unimaginable given the current state of numbness, but we are not far from this now.
None of this should be surprising. No other business provides one-quarter of its products and services at no charge or to consumers who perceive services as a right and have no knowledge of the actual cost. Hospitals cannot ethically or legally say no to anyone. They cannot simply raise their prices; they have no control over their own pricing.
What differentiates health care is that it is mission-driven. But hospitals are ultimately businesses, too, and without money, they cannot fulfill their mission.
To preserve a single standard of care in Massachusetts, there needs to be significant structural change, collaboration on multiple levels and action. Or, we need to admit, out loud, that differentiated medicine has become socially and morally acceptable.
The health care community must renew the spirit of collaboration that once existed and stop working at odds over the same rolling penny. A step in the right direction occurred earlier this month when over a hundred of the region’s top health care executives came together to discuss our common problems. A survey of this group found that seven in 10 admit that Massachusetts’ ability to provide a single standard of care to its citizens has already been compromised.
Nearly three-quarters believe that the level of reimbursement to hospitals is an indication that government leaders do not fully recognize the financial pressure under which hospitals are operating. Better collaboration must also take place between the public and private sector. Government should be working with the providers, payers and leaders outside the health care industry to find long-term innovative solutions that don’t simply shift costs.
Finally, there must be greater collaboration with patients. Right now, patients are part of the problem whether they know it or not. Denial has kept patients shielded from the truth.
It is time to face reality, as harsh as it might be. Not accepting this challenge will assure that recovery is not possible.

ELLEN LUTCH BENDER is director of health care strategies at Boston-based law firm Brown Rudnick Berlack Israels LLP.
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@2004 Boston Business Journal. All rights reserved.