THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Simmering spat over payments between Patrick, BMC boils over

By Liz Kowalczyk
Globe Staff / January 8, 2010

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A yearlong dispute over the adequacy of state payments to Boston Medical Center has erupted into an open and pointed disagreement between the hospital’s outgoing president and Governor Deval Patrick.

In a Christmastime letter to the hospital’s board chairman, Patrick wrote that, during a speech to wealthy hospital donors, Boston Medical Center president Elaine Ullian made comments that were “wrong’’ and “unhelpful’’ when she asserted that the state is neglecting its financial responsibility to the hospital.

“What troubles me most,’’ Patrick went on to say, “is Elaine’s claim that I am personally insensitive to the people that BMC serves.

“She forgets that I am of the people you serve,’’ he said. “As a kid, I received care in the kind of facility BMC is trying not to be, listless, under-resourced, second-hand-feeling care in facilities that were as neglected as the people they served.’’

Boston Medical Center spokeswoman Ellen Berlin said Ullian would not comment on the governor’s letter or discuss the remarks she made to hospital philanthropists. The hospital would not provide a copy of those remarks. “It was a private event,’’ Berlin said.

A copy of the governor’s letter, which was dated Dec. 23 and hand delivered to board chairman Edmond English, was obtained by the Globe.

English also declined to comment, although the hospital provided a copy of his reply to Patrick. In his response, English did not specifically address the governor’s concerns, but said he looks “forward to working with you and your team in putting aside past differences and forging a new and lasting solution to the funding issues that are before us.’’

The relationship between the state’s largest provider of medical care to the poor and state officials has been strained for months. It broke down in July, when Boston Medical Center filed a lawsuit in Suffolk Superior Court against Dr. JudyAnn Bigby, health and human services secretary, accusing state officials of illegally cutting payments made to the hospital for treating thousands of poor patients, a decision executives said could financially unravel the urban hospital’s key services.

Boston Medical Center, which has more than 6,000 full- and part-time workers, was created through the 1996 merger of Boston City Hospital and University Hospital. The lawsuit argues that the state has financed its health insurance law, a model for national healthcare overhaul, on the backs of poor residents by cutting money to the hospital that cares for many of them to pay for expanded coverage.

While it has yet to file audited financial results for the fiscal year that ended Sept. 30, Boston Medical Center estimates it lost $38 million, its first loss in five years. The hospital also projects that it will suffer a $134 million loss in its current fiscal year, which began Oct. 1.

At the time the suit was filed, Bigby said she was “greatly disappointed’’ and was confident the administration’s actions have been legal. Since then, the state and BMC have continued to negotiate with the help of a facilitator, said Patrick’s letter to English.

In his letter, Patrick said that even though Ullian is leaving her job, he must address her remarks to donors on Nov. 23. An administration official said a person who attended the event later contacted Patrick and relayed some of Ullian’s remarks.

Ullian, who has run the hospital affiliated with Boston University for 14 years, plans to retire Jan. 29. Earlier this week, Boston Medical Center said it has hired a high-ranking executive from Brigham and Women’s Hospital, Kate Walsh, to replace Ullian.

While the hospital’s patients are fortunate to have Boston Medical Center and “Elaine’s able advocacy,’’ Patrick said, “there are issues about the BMC operating model that have to be addressed.’’ He said the hospital’s costs are the highest of all the state’s hospitals, even when considering the level of patient illness. And, he said, Boston Medical Center is the largest single recipient of state funding of any kind.

“In a time of scarcity, HHS Secretary JudyAnn Bigby and I have to address high costs,’’ Patrick wrote. “Trying to do so does not mean we are insensitive to BMC’s mission. It means we are doing our jobs.’’

Hospital vice president Tom Traylor has said previously that an analysis the hospital commissioned by Bain Capital found BMC’s costs to be average compared with major Boston teaching hospitals.

In Ullian’s remarks, Patrick said, she also complained that the state did not funnel federal stimulus funds to Boston Medical Center. But Patrick said that money was needed to close a $9 billion budget gap in the last 18 months.

Patrick said Boston Medical Center has not been transparent about the reasons for its high costs. “There is an unhelpful pattern I perceive in Elaine’s advocacy, which is to treat issues or questions about BMC as an attack on the mission itself,’’ Patrick wrote. “. . . Elaine’s comment aside, I still hope that we will work together to resolve these questions and get back to our common cause of giving excellent care.’’

Liz Kowalczyk can be reached at kowalczyk@globe.com.

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