In response to recent reductions in service payments from the Commonwealth of Massachusetts, Boston Medical Center is cutting $61.5 million from its budget.
The magnitude of the reduced payments and state budget cuts to Boston Medical Center is $114 million - $84 million less in Section 122 supplemental payments and a $30 million reduction in Medicaid rates for fiscal year 2009.
Boston Medical Center intends to reduce nearly 130 FTEs across the hospital, which will affect 250 people and save $10.5 million. Officials said the reduction in staff will reduce services and access to services in various clinical and administrative/support areas.
"When the state made the recent cuts to close the budget gap - and the administration cut Medicaid and healthcare funds as much as they did - Boston Medical Center felt more than its fair share of the pain," said Elaine Ullian, Boston Medical Center's president and CEO. "More than 50 percent of BMC's patients are low-income - and they are the people who are most hurt by any reduction in access or services."
Ullian said BMC would take other budget cutting measures, including:
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reducing $14 million in non-salary expenses over two years, affecting such services as support to physicians, insurance coverage and existing contractual relationships;
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eliminating support to Quincy Medical Center as of June 30, 2009, saving more than $2 million;
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and reducing capital spending by at least 35 percent and deferring several major projects, thus cutting more than $35 million in expenses.
Based on current rates and proposed cuts for next year, the commonwealth's government will only pay Boston Medical Center 64 cents for every dollar it costs to provide care to low income patients.
Ullian said additional steps to cut expenses and reduce operating costs are likely as Boston Medical Center identifies other actions it must take in response to the state's decision. She said the demand for hospital services is greater than ever, and Boston Medical Center is seeing record numbers of patients and operating at nearly full capacity.
Ullian plans to continue talks with state officials in the hopes of identifying alternative funding for BMC. Hospital administrators will examine spending and look for additional opportunities to reduce costs. At the same time, she said, the hospital will continue efforts to increase patient volume.
"Beyond the immediate impact of these cuts, we can't lose sight of the future of safety-net hospitals under healthcare reform," said Ullian. "While the goal of healthcare reform is to expand coverage, it is imperative that we not diminish the access that the newly insured count on. For everyone who cares about access and quality of care for the most vulnerable, as well as the future of healthcare reform, this is a very serious issue and one that deserves a true public debate."