Published: 26 February 2001
Analyst(s): Jonathan Edwards, Patrick J. C. Powers
Management Summary During late 1999 and 2000, the financial health of Boston-area healthcare providers seriously deteriorated, with many hospitals cutting services, closing emergency rooms, laying off medical staff and hovering on the edge of bankruptcy. Some larger integrated delivery systems (IDSs) addressed the situation by forcing HMOs to increase reimbursement rates substantially. Most loss-making hospitals are placing their hopes on recent Massachusetts initiatives to reduce the contributions of hospitals to the uncompensated care fund and to increase state Medicaid reimbursement rates to cover the cost of care. State intervention was also required to take over the finances of the region's largest health insurer, Harvard Pilgrim Health Care (HPHC), after it reported massive losses in 1999. HPHC has now returned to financial health, as has Tufts Health Plan, the third-largest Boston-area health insurer. The Boston-Lawrence metropolitan statistical area (MSA) comprises the eastern Massachusetts counties of Bristol, Essex, Middlesex, Norfolk, Plymouth and Suffolk. The area is home to seven IDSs: three in the immediate Boston area and four in the suburbs. Partners HealthCare, the area's largest IDS, includes two world-renowned hospitals in Boston -- Massachusetts General Hospital and Brigham and Women's Hospital -- and several community and specialty hospitals. CareGroup, which is struggling financially, includes Beth Israel Deaconess Medical Center in Boston and several community hospitals. Caritas Christi Health Care System, the region's main Catholic healthcare provider, operates hospitals in Boston and in southeastern Massachusetts that serve a large number of low-income residents. Outside Boston itself, Southcoast Health System serves the Fall River-New Bedford area, Northeast Health Systems serves the north shore region, and Hallmark Health serves the northern suburbs of Boston. Lahey Clinic includes a hospital north of Boston and a 500-physician...
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