Travaglini case reveals hospital rift

Efforts by the state's community hospitals to hire former Senate President Robert E. Travaglini to push their legislative agenda have exposed a growing rift between urban academic medical centers loaded with money and power and weaker community hospitals in the suburbs.

It also highlighted community hospitals' dissatisfaction with the Massachusetts Hospital Association , the large industry group whose membership includes all 69 Massachusetts hospitals. Opposing viewpoints within the organization often leave it hamstrung and, some say, ineffective on some key issues.

The competition between large city-based hospitals and their suburban counterparts is intensifying as lawmakers and regulators decide how to divvy up Medicaid dollars and the state's free-care pool as part of the healthcare reform. Already facing intense financial pressures, community hospital executives worry that unless they get stronger representation on Beacon Hill, they will be left behind as lawmakers make decisions that will shape the state's largest industry for years to come.

"The community hospitals are under siege right now, and they need to do something," said Andrei Soran , chief executive of MetroWest Medical Center , which has hospitals in Framingham and Natick. MetroWest is not one of the 24 members of the state's other hospital association, the Massachusetts Council of Community Hospitals , but Soran said it is considering joining.

Revenue figures released this week by the state Division of Health Care Finance and Policy show that a few large teaching hospitals such as Massachusetts General Hospital and Brigham and Women's Hospital are reaping healthy profits, but many community hospitals are barely in the black.

Looking to add some political muscle, the community hospitals council offered Travaglini a $300,000 salary, plus benefits and expenses, to become the organization's first president. The group currently has a part-time executive director, Donald Thieme, who lacks Travaglini's political resume. Travaglini says he plans to start a lobbying and consulting firm with his long-time friend and lawyer, Thomas R. Kiley . The community hospitals -- which already pay tens of thousands of dollars a year to well-connected lobbyists -- are still hoping to retain Travaglini's services in some capacity.

"We have formally expressed our interest in having Senator Travaglini work with us. He has not declined that offer or that interest. These are very real and very professional and confidential discussions that are still going on," said Stephen Laverty , chief executive of Northeast Health System , in Beverly.

Community hospitals need additional strength to carry their message to Beacon Hill, partly because conflicting agendas on some issues diminish the Massachusetts Hospital Association's effectiveness.

For instance, community hospitals are struggling to compete for patients with teaching hospitals. They also compete for Medicaid and free-care pool dollars with the large safety net hospitals, Boston Medical Center and Cambridge Health Alliance, which treat large numbers of Medicaid patients.

"It really is difficult to represent the interests of all those parties," said Mike Sack, chief executive of Hallmark Health System , which operates hospitals in Melrose and Medford. "It is an urgent time."

Meanwhile, the big downtown hospitals -- Massachusetts General Hospital , Brigham and Women's Hospital , Beth Israel Deaconess Medical Center , Children's Hospital Boston , Boston Medical Center , and Tufts-New England Medical Center -- are casting wider nets for patients and moving more outpatient facilities to the suburbs. They are using their well-known brand names to aggressively advertise services and promote high-tech medical procedures.

Community hospitals also are facing pressure from their own neighborhood doctors. Physicians in the suburbs are providing more outpatient services that community hospitals have typically provided, such as MRIs, cancer radiation treatment, and routine eye surgeries. That's taking lucrative business away from the local institutions.

Complicating matters further, community hospitals receive smaller payments from private health insurance companies because they treat fewer patients and lack the negotiating power of the major medical centers. As a result, the wealthy hospitals are getting wealthier.

But teaching hospitals say it's not all about competition, and that they often team up to work with local hospitals.

Also, healthcare reform will result in more people with insurance, and some of them will seek medical care at community hospitals, said John Erwin , executive director of the Conference of Boston Teaching Hospitals.

"They'll go wherever is closer to them," Erwin said.

Community hospitals argue that they hold the key to lowering healthcare costs because they can offer some services at lower costs.

For example, they want the state to allow them to offer elective angioplasties, which use a catheter and a tiny balloon to clear blocked arteries.

Currently, the state is only permitting some community hospitals, in cooperation with teaching hospitals, to perform the procedure on a trial basis. Many states allow smaller hospitals to perform the procedures. The teaching hospitals say the procedure should not be performed in hospitals that do not have open-heart surgery programs as back-up. But Ed Moscovitch , president of Cape Ann Economics , who has performed studies for the community hospitals council, said the teaching hospitals are really just protecting their revenue.

The Massachusetts Hospital Association acknowledged that its members have competing agendas on angioplasties and other matters, but said it remains an effective advocate for major state and federal issues, such as overall Medicaid and Medicare reimbursement. The majority of its members are community hospitals, said Michal Regunberg , the association's spokeswoman, and many chief executives from smaller hospitals serve on important committees.

"Where there are differences," she said, "MHA will bring the divergent interests around one table to find a common position."

Christopher Rowland can be reached at crowland@globe.com.