Wednesday, June 12, 2024
Gov. Charlie Baker vetoed an increase to a hospital aid program after state senators cut his proposed increase in half. (Photo: Sam Berube)

Gov. Charlie Baker vetoed an increase to a hospital aid program after state senators cut his proposed increase in half. (Photo: Sam Berube)

The ink was barely dry on Cambridge Health Alliance’s break-even budget for the coming year when $2.3 million in expected revenue for the financially challenged health care system was placed in doubt because of a gubernatorial veto.

Officials are working with legislators to override the veto, Chief Executive Patrick Wardell told Alliance trustees at a meeting Tuesday, and Chief Financial Officer Jill Batty reassured board members that contingencies built into the budget would offset the lost revenue even if there isn’t an override. The trustees then gave final approval to the budget, which forecasts a surplus of only $500,000 for the year.

According to Wardell, Gov. Charlie Baker’s original budget request for the 2017 fiscal year, beginning July 1, included a 10 percent increase in appropriations for the Delivery System Transformation Initiatives program, known as DSTI. (The federal government shares the cost of the program). That is extra money for the Alliance and six other safety-net hospitals serving large numbers of poor or uninsured patients to help them improve care, cut costs and get the technology allowing them to enter into performance-based contracts favored by the health reform movement. Hospitals must meet benchmarks to earn the money.

State senators cut the governor’s increase in half, to 5 percent, Wardell said, but Baker then vetoed the entire increase. In an explanation published by the state’s Legislature, Baker said the increase was “not recommended” and the amount after the veto was all that was necessary.

If the veto stands, the Alliance would get up to $22.4 million, the same as in fiscal year 2016, depending on its performance; Baker’s original proposal would have given it up to $24.6 million. The Alliance has lost money on its health care operations for years and depends heavily on extra help from the state and federal government. Batty said the Alliance has always met performance requirements under initiatives program.

De-emphasis on growth

The Alliance’s budget for the coming year forecasts fewer visits to doctors and admissions to the hospital than this year, a departure from previous budgets that predicted increases in volume that often didn’t materialize. Members of the board’s finance committee applauded the budget’s realism when they approved it June 28, but some said they worried that it departed from CHA’s strategic plan to boost volume.

Some of those at the full board of trustees meeting made similar comments. “Volume predictions [in the budget] show primary care essentially flat,” said Dr. Katharine Kosinski of Cambridge, former chief of pathology at the Alliance and a longtime physician there. “This will take us off our strategic plan.”

Replied board vice-chairman Joshua Posner, a developer of affordable housing, said, “The strategic plan is important, but having a balanced budget is foundational.”

Because of reduced volume, the Alliance cut staff in fiscal year 2016, most through voluntary resignations and attrition. Batty said there was also a “small” number of layoffs in June, the end of the fiscal year; health care system spokesman David Cecere said 33 people were laid off, none health care providers, and that the layoffs and voluntary resignations helped balance the budget for fiscal 2017and are in line with the number of employees needed.

While cutting clinical support and administrative jobs, the Alliance has been trying to hire more physicians. The 2017 budget calls for adding the equivalent of 29 full-time providers.