State seeks to shift Medicaid patients' basic care

The Romney administration wants to prohibit low-income residents from seeing primary care doctors at hospitals, jumping into a longstanding debate about whether Massachusetts patients are driving up healthcare costs by relying too heavily on expensive medical centers.

State officials want to shift patients enrolled in Medicaid -- the state and federal insurance program for the poor that's facing skyrocketing costs -- to community health centers for basic medical care, which they estimate would save the state $16 million next year.

Ronald Preston, secretary of the Executive Office of Health and Human Services, said that Medicaid patients would still be able to make appointments with cardiologists, gastroenterologists, and other specialists at hospitals. But community health center staff have more time to provide basic medical care and can more easily connect patients with a wide array of social-service programs, he said. Comparable services are cheaper at community health centers, which means state fees are lower for health centers than for hospital outpatient departments.

Officials also wonder if, just by seeing a doctor at a hospital, patients are more likely to receive unnecessary expensive tests because they're readily available.

At least 20,000 of the state's 928,000 Medicaid patients and an unknown number of uninsured patients receive most of their primary care in hospitals.

"A hospital is there to be a hospital, to treat emergencies and admit patients overnight," Preston said. "When patients show up at their door, it's a very expensive proposition."

The plan is one of several administration budget proposals --which must be negotiated with the Legislature -- that would reduce state payments to hospitals by $87 million to $100 million for treating poor patients. One proposal would eliminate Medicaid payments to help train young doctors, or residents, a plan that hits academic medical centers especially hard. Another would do away with a special pool of relief money for hospitals like Boston Medical Center and Cambridge Hospital that rely on the funds to treat large numbers of poor patients.

"People are not going to be happy about this," Preston said. "But we're talking about a rate of increase in the cost of the Medicaid program that is way out of proportion to anything else going on in state government."

Dr. JudyAnn Bigby, an internist at Brigham and Women's Hospital, said shifting Medicaid enrollees to community health centers could harm many patients. Bigby, who is Boston Mayor Thomas Menino's personal physician and also cares for about 200 Medicaid patients, said community health centers may not have the space and staff to take on thousands of extra patients. In addition, she said, the administration's proposal ignores patients' personal preferences and the fact that many patients who end up in hospital outpatient clinics are "pretty sick people" who need to see specialists in addition to their primary care doctor.

"The majority of my patients are not coming for prevention," Bigby said. "They're on complicated medical regimens with five or six problems including high blood pressure, diabetes, high cholesterol, and arthritis. If you put them in community health centers where they don't have specialists, what's going to happen to continuity of care and communication between doctors?"

Hospital executives said the overall cuts will hurt their already struggling institutions. Medicaid payments for Boston Medical Center, which projects it will post a $15 million operating loss this year, would be reduced to $48 million from $78 million under the governor's proposals, said Thomas Traylor, the hospital's vice president of federal, state, and local programs.

"We're quite concerned," he said. "We don't think they're targeting us specifically. It's just more government money comes our way because we're large, so some of these cuts are going to hit us harder."

The Romney administration is going after a Massachusetts healthcare tradition: the tendency of patients to use hospitals heavily for all types of care, and especially to rely on teaching hospitals. Managed care insurance companies beat back healthcare costs in the 1990s, largely by reducing the number of days patients stay in the hospital and eliminating overnight stays altogether for simple operations. But insurers have had limited success in Massachusetts shifting patients from hospitals to health clinics and doctors' offices.

During the 1990s, the state's hospitals logged 36 percent more outpatient visits per capita than the average US hospital, according to a report two years ago from the Massachusetts Council of Community Hospitals. Medical inflation rose 73 percent in Massachusetts during those years compared to 49 percent nationally, according to a 2000 state analysis. At the time, state health officials said one reason may be residents' heavy use of academic medical centers.

The Medicaid program has become a driving force in the state's budget crisis, with costs growing at a 13 percent annual rate the past two years. The Romney administration is recommending budget cuts for the fiscal year that starts July 1 that will keep growth in the Medicaid budget to 8 percent, or $496 million, for a total cost of $6.7 billion. Many Medicaid recipients already use community health centers. About 319,000 Medicaid recipients are enrolled in the agency's primary care program, in which they are assigned a primary care doctor to coordinate their care, and at least 20,000 of these recipients are enrolled with doctors who work in hospitals.

In addition, the administration no longer wants to pay for uninsured patients to get care at hospitals that they could get in community health centers. The "free care pool," a fund run by the state to reimburse hospitals and other medical providers for treating the uninsured, would no longer pay hospitals for treating such basic care ailments as non-emergency colds and coughs and routine physical exams.

Partners HealthCare System, the parent organization of Massachusetts General Hospital and Brigham and Women's Hospital, estimates its Medicaid payments will fall to $110 million from $121 million under the administration's plan. Partners hospitals are generally profitable, but executives complain that Medicaid payments currently cover just 54 percent of the cost of caring for patients. The hospitals make up much of this shortfall with higher payments from private insurers.

Partners executives said they are trying to move patients to lower cost facilities on their own, and recently moved more than 125 patients from Brigham to Brookside Community Health Center in Jamaica Plain for dental care.

Edward Grimes, executive director of Upham's Corner Health Center in Dorchester, said a number of the city's community health centers are newly renovated and expanded and can accommodate more patients.

"But, if it means uprooting patients and interfering with longstanding doctor and patient relationships, that's not appropriate," he said.

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