Boston, Mass.–Boston Medical Center is about to start the next and probably last phase of its internal reorganization. Hospitals nationwide are in the midst of radical changes as the costs of treating people who are ill and injured grow exponentially. Medical costs consume 25 percent of a hospital’s budget. The Boston group is cutting back on costly procedures that are not needed and of less use to the patient–including elective surgery and heart procedures, which are funded by public and private taxpayers.
Every year, about 2,000 elective surgeries are performed here each year, making elective surgery a disproportionately large expense at this hospital. The executive committee of the board of trustees met Friday and decided unanimously to implement a series of last-minute changes in the processing and payment of patients’ Medicare and Medicaid claims.
As a result, nearly all the elective surgeries at Boston Medical Center will not be performed, saving approximately $8 million in this fiscal year’s budget. This money is likely to be redirected to the hospital’s flagship center and a new intensive care unit. The hospital is hoping to save another $6 million by eliminating 5-10 other routine procedures.
Earlier this year, the Boston Children’s Hospital in Boston also announced that it will eliminate elective surgeries. The measure is a response to the board’s cost-cutting plan. The hospital expects to save $4.7 million through the reduced use of emergency room care and by reallocating existing work forces to medical care.
“It’s a cost cutting measure,” Dr. Jack Barry, chief medical officer of Boston Children’s Hospital, told Fox News. “The way we fund the hospital is through a mix of public and private sources. A substantial portion of this money would be directed to programs that we feel are of higher impact to our patients and our community.”
Dr. Michael Brownstein, director of clinical operations for Pediatric Emergency at Boston Children’s Hospital, told Fox News: “We’re definitely concerned. We’re adjusting our plan to fit what the administrators in the hospital can do.”
The medical care industry is battling a dual crisis: More patients are presenting with chronic conditions such as obesity, diabetes, arthritis, and cancer, which requires more expensive hospital care and tests. Patients with moderate to severe conditions receive special attention. The cost of caring for a patient suffering from diabetes or cancer typically exceeds $40,000 per month.
“The financing challenges of maintaining full capacity for patients with these complex diseases can be extraordinary,” says Dr. Nora Fiorella, senior vice president of clinical operations for Mercy Health & Hospitals.
“The fee-for-service payment model has not matched up with Medicare’s future projections of beneficiary and provider utilization patterns,” the review states. “The net effect of this financially unsustainable fee-for-service payment model is that acute care facilities have to now provide more care than they would prefer, for less money.”
Bob Jackson is currently the senior vice president and editor-in-chief of Fox News Magazine.