When the state reneges

Boston Medical Center issued this statement yesterday:

Boston Medical Center announced today that it has made a reduction in force of 119 people, including 44 nurses and 30 management staff. Another 40 employees will see their hours reduced. The hospital has a total work force of almost 6,000 people, more than 1,500 of whom are nurses.

“The hospital is projected to lose $175 million this year due to dramatic changes in Medicaid reimbursements,” said Tom Traylor, BMC’s vice president of federal, state and local programs. “We have been talking to the staff about this new reality for well over a year, and have been working to assess and increase efficiency in every corner of the hospital. We have been consulting with outside experts to study the efficiency of delivery of patient care, and they found very little excess capacity particularly in terms of hospital staffing levels. This layoff is one necessary element of addressing the hospital’s financial situation.”

This situation is a shame. When BMC was created and throughout its history, there has been a recognition of its special role, the largest "safety net" hospital in the region. It received promises during the debate on the state's universal access legislation that this role would be supported and preserved. When the state reneges on Medicaid reimbursements, all hospitals are hurt, but this one especially so.

If you do the math, a reduction in force of 119 people does not make up $175 million, so the hospital is surely making other difficult choices. They are lucky to have Kate Walsh, an excellent administrator, as CEO. But there are limits as to what any one person can accomplish when a major payer walks away from its obligations.