Care bill may be a hospital bonanza

With heavy lobbying from powerful healthcare providers and insurers, a bill designed to expand healthcare coverage to the uninsured has turned into what many critics say is a financial bonanza for some of Boston's major hospitals.

Under the House proposal, the increase in Medicaid rates used to reimburse hospitals, doctors, and community health centers would add $270 million in new revenues by the third year of the proposed law. The Senate plan, as passed by that chamber last fall, was even more generous, providing $540 million above current reimbursements within three years. The cost is split by state and federal governments.

A good chunk of that extra revenue will go to several of Boston's prestigious teaching hospitals that have in recent years made huge profits. The hospitals argue that Medicaid reimbursements fall short of the cost they incur when providing services for patients on Medicaid, the state and federally funded program for low-income residents. Their spokesmen also point out that the bill would spend hundreds of millions of dollars to expand Medicaid's coverage for individuals and provide financial assistance to low-income people who would be required to buy health insurance under the bill.

Another aspect of the battle is that House Speaker Salvatore F. DiMasi is resisting efforts to continue special Medicaid funding for Boston Medical Center and Cambridge Hospital, according to those negotiating the bill. Senate President Robert E. Travaglini has advocated that the two hospitals should get the lion's share of the $385 million in a so-called Medicaid waiver from the federal government because they serve a major portion of the poor, negotiators said.

But critics of the proposals say the hundreds of millions of dollars that the state's major healthcare interests have persuaded legislators to include in the bill dwarfs the money for expanding health coverage and reduces critical funding for some of the state's struggling community hospitals. With the bill also requiring that individuals buy health insurance, insurers will have a new market among the 500,000 to 600,000 people currently without coverage.

''Powerful hospitals and insurers did a better lobbying job than access advocates," said Alan Sager, one of two directors of the Health Reform Program at Boston University's School of Public Health. He estimates that the House bill is more generous than previously thought.

''They have been debating for a year the question of covering everyone . . . and yet it appears that the legislative compromise will only provide $144 million through the new employer assessment . . . in its first three years," Sager said.

Secretary of State William F. Galvin, whose office monitors Beacon Hill lobbying and who is the only major political figure to support a 2000 ballot initiative for universal healthcare, agreed, saying, ''This bill is far more about hospital compensation and insurance company premiums than it is about individual access to healthcare.

''The hospitals and the insurance company are professionally represented in this process," he said. ''Plain ordinary sick people aren't."

Although specifics of the plan are still being worked out behind closed doors by House and Senate negotiators, some lawmakers who advocate that the bill's priority should be near-universal health coverage also expressed concern.

''Historically, every time we are at the table with these very powerful providers, they will hire the best lobbyists and they are very good in influencing the governor and the Legislature and shaping the final product and taking most of the pie," said Senator Mark C. Montigny, a New Bedford Democrat who is former Senate chairman of the Committee on Health Care Financing.

One of the major beneficiaries would be the nonprofit Partners HealthCare, whose network includes Massachusetts General Hospital and Brigham and Women's Hospital. According to those who have seen early drafts of the legislation, Partners, which had over $300 million in profits last year, stands to gain more than $13 million a year in new revenues.

Partners -- through its chairman, Jack Connors, a politically influential advertising executive -- has been a driving force in lobbying Beacon Hill lawmakers. It teamed up with Blue Cross-Blue Shield in hiring well-connected State House lobbyists. The two entities paid almost $500,000 in lobbying fees in 2005, records at the Secretary of State's office show.

Partners HealthCare referred all question to the Massachusetts Hospital Association. James T. Kirkpatrick, the hospital association's vice president for healthcare finance, strongly defended the funding for Medicaid rate hikes.