Shell game on Massachusetts health costs

Hospitals are making money. Insurers are losing money. If only it were that simple.

Most hospitals in the state are flush, according to a pair of new state reports.

Well, maybe sort of.  Partners told the Globe said they’ve started losing money since the report on hospital reserves showed that Partners has $5.7 billion in total net assets.

“Having sufficient assets allows us to sustain our mission of patient care, teaching, research and service to the community during economic downturns like the one we just experienced,” said Partners spokesman Rich Copp. “Since 2008, our numbers have been reduced by hundreds of millions of dollars as a result of the recession.”

The Mass Hospital Association called the state numbers “misleading.” The Globe story also quotes Nancy Kane, a Harvard School of Public Health researcher, saying that it all depends on how you define profit and losses

“More needs to be done before one could make a final determination that there are excess resources in these institutions,’’ Kane said.

While trying to make sense of all this, it is worth noting that a recent BU study found that Acute hospital costs per person in Massachusetts have long been the highest in the nation, and therefore in the world. In hospital fiscal year 2007, hospital costs here reached 55.4 percent above the U.S. average—the greatest excess then recorded.

So, is it a surprise that, at the same time, health insurers say they are losing money?

Or are they? Again, the Globe reports:

Barbara Anthony, undersecretary of the state Office of Consumer Affairs and Business Regulation, which oversees the insurance division, said insurers continue to enjoy large financial surpluses. A state report released May 2 showed eight health insurers in Massachusetts had a total surplus of $2.5 billion in 2008, the latest data available.

“The real issue in health care is the skyrocketing increases that are drowning small businesses and working families, who do not have billions of dollars in reserves to fall back on,’’ Anthony said. She said regulators are working to make sure insurers remain solvent while state officials try to engage insurers, hospitals, and doctors to tackle the issue of costs.

In the midst of all these swirling apples and oranges, the state Senate passed a health care measure yesterday that would use some of the hospital surpluses to help small businesses deal with rising premiums. AP reports.

To slow premium increases, the bill would require wealthier hospitals to contribute to a fund to help ease those rising costs. Senate backers of the bill say the contribution of $100 million could reduce small-business health care costs by 2.5 percent.

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