The Cambridge Health Alliance did better than it expected in the fiscal year that will end June 30, but not well enough to escape an overall loss of $400,000 – essentially a breakeven amount in an overall $1.1 billion city budget.
The health care system, which serves a high proportion of poor and uninsured patients, also expects to incur a bigger loss in the next fiscal year: $8.4 million.
CHA’s finance committee approved the fiscal 2026 budget May 27, sending it to the full board of trustees. The budget anticipates that the health care system’s revenues will rise by $40.6 million in the next fiscal year compared with this year, primarily from more visits to doctors and growth of revenues from the Alliance’s outpatient pharmacy program. Costs will also increase as the Alliance pays more for staff and must buy more drugs for its growing pharmacy services.
The fiscal year 2026 budget has no adjustments for new federal policies, chief financial officer Jill Batty said in answer to a question from David Kale, head of the trustees’ finance committee and former city finance director. Batty said most elements of a federal budget approved by the U.S. House of Representatives, which includes deep cuts to Medicaid and other health programs, will take effect after the Alliance’s next fiscal year.
On the same day the committee considered the fiscal 2026 budget and Batty made her statement, Gov. Maura Healey and Democratic lawmakers held a press conference at the Alliance’s Revere clinic where they predicted that the House’s budget would be disastrous for hospitals. Healey said it was a “blunt force ax” that would leave many people without health insurance, The Boston Globe reported. Those people would end up in already overburdened emergency rooms, she said.
Asked to comment, Alliance spokesperson David Cecere said in an email: ”The FY26 budget that was presented and approved unanimously by CHA’s board finance committee was the result of hard work across the organization to improve quality and safety, increase access and productivity, and standardize operations to better serve our patients and communities. This improved performance strengthens CHA’s ability to sustain its mission and address potential headwinds from federal policy changes that are yet to be determined. The proposed cuts discussed at the press conference will be implemented over 10 years. Most proposed changes in the House bill which would impact CHA are expected to have implementation dates after June 30, 2026.”
The Alliance budget predicts that CHA will spend $8.4 million more than it will get from patients and other sources in the next fiscal year. In this fiscal year, the Alliance has a larger gap – about $33.3 million. That’s not the end of the story, though, because this fiscal year the Alliance is getting $32.8 million in federal payments for Covid costs. The result is the loss of only $400,000.
CHA won’t get any extraordinary income similar to the Covid funds in the 2026 fiscal year, according to the budget, resulting in the expected larger loss.
The Alliance has a close connection to Cambridge, though it has expanded north and west and Cambridge residents make up a minority of patients. CHA is a public health care system; city taxpayers will contribute about $8.9 million in the next fiscal year in return for the Alliance operating the city’s public health department.
Staff will increase by about 47 full-time-equivalent positions in the next fiscal year, according to the budget. More of those employees will be employed by CHA because the budget calls for reducing the number of “agency” workers – professionals hired from employment agencies who travel from position to position to fill vacancies.
Agency employees are generally more expensive than permanent staff; the number of agency workers will decrease by about 35 full-time equivalent positions.
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