May 21, 1999

Samuel O. Thier, MD

At the Partners town meeting held May 17 in a packed O'Keeffe Auditorium, Samuel O. Thier, MD, president and CEO of Partners HealthCare, discussed national and local financial challenges that are affecting Partners and its affiliated institutions, focusing on cuts in Medicare as well as tougher demands from managed care companies.

"Even though we are still in better shape than most health care institutions, with a substantial gain in market share, it is crucial for us to look ahead and rethink how we perform for our system to succeed," said Thier. "The challenge is for our organizations to think more creatively and cooperate as a whole to utilize our total resources."

Thier noted that such "creative thinking" has already led to substantial collaborations and partnerships that have developed among Partners institutions. These collaborations have and will continue to contribute to the overall success of the system.

Such collaborative achievements include: provider order entry extended to the MGH; telemedicine technology shared with BWH and Partners Community HealthCare, Inc. (PCHI); new outpatient clinical information systems; the establishment of the Women's Health Center of the North Shore and North Shore Cancer Center; the formation of BWH/Faulkner Hospitals, Inc.; the collaboration of Radiology departments among the MGH, BWH and PCHI; the integration of MGH and BWH Neurology departments; and a systemwide commitment to community benefits.

To address the challenges of the current health care environment, Thier noted that leadership at Partners is helping to coordinate a variety of efforts on a federal and state level. On the federal level, Partners is working with hospitals in Boston and across the country to ease the effects of the Balanced Budget Amendment (BBA) that lead to severe Medicare cuts. The impact of the BBA between 1997 and 2002 on the Partners system is estimated at approximately $340 million. Thier and colleagues are urging policymakers in Washington to look at current data and reconsider some of the provisions of the BBA.

On the state level, Partners is backing legislation that would require insurers to make payments promptly and observe fair contracting practices. According to Thier, delays or denials of reimbursement for legitimate claims are causing a substantial financial drain on all hospitals. Thier also talked about the situation with Tufts Associated Health Plan, saying that Partners physicians have closed their panels to new Tufts patients in response to inadequate reimbursement.

The remainder of the town meeting focused on questions that employees and staff had submitted.

• In addressing a concern about the working relationship between the MGH Pediatrics Service and BWH's NICU, Thier noted that the two services are working to integrate more closely without breaking the already established relationship that BWH has with Children's Hospital. Efforts also are under way to intensify the marketing of the MGH Pediatrics Service.

• Responding to a question about dealing with wage discrepancies between Partners' union and nonunion hospitals, Thier stated that each hospital has a different culture and mission, and because of these differences, the question of wages must be addressed at an institutional level rather than systemwide.

• James J. Mongan, MD, MGH president, addressing the hospital's current length of stay, said that it went up to 6.7 days last summer and last month was down to 5.67. "We don't know all of the factors behind the increase," Mongan said, "but everyone has been working hard to get it under control. Sustaining this lower length of stay is critical in moving forward in our budget planning."

• Mongan also addressed concerns about layoffs by saying that the hospital is taking steps to close what is projected to be a $40 million budget gap. If there is a reduction in positions, he said, he is hopeful that it can be limited to positions that are vacant or are expected to be vacated through attrition. Mongan added that the initial budget planning for FY '00 does include a wage increase program, but it is still too early to be able to promise such an increase.

Additional questions submitted for the Town Meeting will be addressed in future issues of Hotline.