With concern raised over the ongoing financial struggles of the Steward Health Care System, legislation introduced in the U.S. House of Representatives would provide additional funding to “fill the gaps” for at-risk community health systems, according to one of its authors, 3rd District U.S. Rep. Lori Trahan.
Trahan, a Westford Democrat, along with Rep. David Valadao, R-California, co-authored the Reinforcing Essential Health Systems for Communities Act, which would provide more federal funding and support to safety-net, community hospitals.
“Essential health systems serve the most vulnerable families in cities and towns across the nation, and these facilities deserve the funding and support necessary to maintain and expand their lifesaving services,” Trahan said.
Trahan, who recently took the potentially “dangerous” outcomes with Steward Health Care’s system “private equity playbook” to task, also joined other House colleagues in pressing Steward about possible closures, violations of Medicare rules and reports of missing payments.
While Steward Health Care Systems has apparently arranged financing to forestall any shuttering of hospitals in Massachusetts, its tenuous operation could still be detrimental to patients.
Presently under the Steward umbrella, Holy Name Hospital in Methuen-Haverhill and Nashoba Valley Medical Center in Ayer wouldn’t benefit from this potential injection of federal cash, since it would apply only to not-for-profit medical centers.
Trahan said the act, which targets over 1,000 medical centers nationwide, would designate about 18 hospitals in Massachusetts as “essential health systems,” including Lowell General Hospital, part of Tufts Medicine, and Lawrence General Hospital, affiliated with Tufts Children’s Hospital and Beth Deaconess Medical Center.
The insurance-reimbursement disparities between the state’s largest medical organizations and those comprised of community hospitals serving low-income populations has been a bone of contention for decades.
Sprawling health-care systems like Mass General Brigham, UMass Memorial Health Care, Beth Israel Lahey Health, and BMC Health System have all improved their reimbursement power by merging with other hospitals to command a larger share of the health-care dollar, at the expense of community hospitals.
Those community hospitals, like those in Steward’s Massachusetts system, typically serve a higher share of patients on Medicare and Medicaid, which typically offer lower reimbursement rates than private insurers whose patients often seek out care at academic medical centers.
These hospitals often provide five times more uncompensated care compared to other hospitals, according to Trahan. Yet, they are historically underfunded and often limited in their ability to maintain and expand the critical health services they offer to patients.
Lawrence General’s Dr. Eduardo Haddad recently shared staff concerns with Gov. Maura Healey and the Public Health Council about the news surrounding Steward Health Care System’s Holy Family Hospitals in Methuen and Haverhill, while stressing his hospital’s commitment to support patients in need.
With the Essential Health Systems legislation, Trahan continues her efforts to support Merrimack Valley health care. “This legislation is designed to deliver additional funding to nonprofit safety-net hospitals that are often forced to fill the gaps left when corporations like Steward move on.”
Hospitals qualify as “essential health systems” if they have a disproportionate patient percentage of Medicaid and low-income Medicare patients. The hospital could also serve a high percentage of Medicaid and low-income patients, or it could help capture the costs of care delivered to uninsured individuals.
“Safety-net providers are vital to improving the health of our community and addressing the health needs of at-risk and medically underserved populations,” said Amy Hoey, president of Lowell General Hospital.
While a targeted correction of the reimbursement imbalance could more quickly be accomplished by the state, we’re glad to see that our representative in Congress has also tried to address this discriminatory practice at the federal level.
Though Steward has been rightfully criticized for a business model that prioritizes profit, its description of the uneven insurance reimbursement playing field correctly characterized the handicaps community hospitals face.
In testimony to the Health Policy Commission for its autumn cost trends hearing, Steward officials urged policymakers “to make bold actions to correct a hospital marketplace that has been functionally broken since the 1990s.”
As Steward pointed out, that situation has been exacerbated by “consolidation and predatory business practices” that have created “a two-tiered system of health care where brand and market power allow a select few provider systems to leech the vast majority of health care resources in the Commonwealth,” leaving community hospitals, as Steward wrote, “to increasingly do more with less.”
Righting this repayment wrong hasn’t gained much traction in the state Legislature, and likely will face even more opposition in Congress, due to a well-funded big-hospital lobby that will lean on both legislative bodies.
Let’s hope one or both can finally break up this reimbursement monopoly.
