The Martha's Vineyard Hospital will be fully covered for any decrease in Medicare funding that flows from a proposed affiliation with the giant Partners Health Care group, a gathering of Island residents were promised this week.
Under the terms of the proposal, which also includes the Nantucket hospital, one of the small community hospitals would have to give up its critical access status, a special designation which allows small rural hospitals to receive full reimbursement for the cost of services.
Sacrificing critical access status will cost the smaller hospital, but could ultimately lead to an estimated $250 million in extra Medicare funding for the state as a whole, including a likely $60 to $80 million windfall for Partners Health Care, the parent company of Massachusetts General Hospital and the largest hospital group in the state.
But the potential cost to the Vineyard hospital remains vague. No figure was mentioned at a public forum Sunday afternoon at the Tisbury School - and contacted afterwards, Martha's Vineyard Hospital chief executive officer Timothy Walsh said the figures remain to be reckoned.
"It's a pretty complicated calculation to do," Mr. Walsh said. "I wouldn't even venture to guess. Relatively speaking though, it's not enormous."
He was similarly inexact about the other financial costs and benefits of the affiliation, although he said he believed overall costs would "probably" go down, due to savings in purchasing and insurance.
"They run about $6 billion a year for an annual budget and we'll be able to be part of their group purchasing [of] medical supplies and equipment, prostheses and stuff like that. That will save us a good sum of money, I think," Mr. Walsh said, adding:
"They also have a malpractice insurance company that they run, that's substantially less than the malpractice that we now have. That's a pretty hefty bill for us. We expect to save substantial money on that."
But he admitted that no precise accounting had yet been done on the potential savings, or on the increased costs associated with connecting the local hospital to the sophisticated electronic patient data system. In opening remarks at the Sunday forum, Mr. Walsh said the information system was the major driving force behind the affiliation. He did not say that the Island hospital would have to pay to buy into the system, but later acknowledged that is in fact part of the agreement now on the table.
"In terms of the up costs, there will be a piece of the information systems that we're going to pay for," Mr. Walsh said.
"We're working that component out too, as part of the due diligence process. But it's substantially less than it would be to do a system on our own," he added.
Absent hard figures about the financial implications of the affiliation, Vineyard hospital executives struggled at Sunday's forum to explain how the amount of $5 million, which will be paid to the Vineyard Hospital as part of the deal, was arrived at.
Hospital vice chairman Timothy Sweet said the figure was negotiated to cover the last stretch of the $42 million capital campaign for a new hospital building, but Massachusetts General president Dr. Peter Slavin said it was the end result of a negotiation over potential gains and losses on both sides. "We started low, they started high and we ended up in the middle," Dr. Slavin said.
The delegation from Massachusetts General and Partners Health Care who attended Sunday's community forum admitted that their institutions stand to gain $60 to $80 million from the affiliation at the outset, although they also stressed that any benefit would not flow for at least four years, and was subject to the vagaries of Medicare regulation. They were not "in it for the money," one executive said.
"It was a strategic decision, mapping out a network," said Massachusetts General chief financial officer Sally Mason Boemer.
"The change from critical access to rural has the potential to help hospitals across the state of Massachusetts. However, we won't know that decision until long after this affiliation is completed," she also said.
Executives from both hospitals said the deal did not amount to a takeover of the Island hospital. The local hospital board would still own the real estate and still have responsibility for day-to-day operations, although Massachusetts General would have power over budgets, major debt and asset transfers.
But it was also confirmed at the meeting that once entered into, there was no way the Vineyard hospital could unilaterally break off the arrangement. In order to end the affiliation, the consent of both parties will be required.
The deal is proceeding quickly. A memorandum of understanding was signed in October, due diligence is now in progress and a definitive agreement is scheduled to be signed in December. Final approval is needed from the state Department of Public Health.
Dr. Slavin told the meeting the affiliation plan is expected to lead to improved quality of care and would not leave the Island hospital out of pocket.
"If at some point in the future we - when I say we I mean Martha's Vineyard Hospital and Mass General - were to decide to change the Medicare designation . . . in a way that would actually reduce Medicare reimbursement, Mass General would make up the difference," he said.
The 25-bed Vineyard Hospital was designated a critical access hospital in 2003 and Nantucket's 19-bed hospital followed suit the next year.
While all speakers at the forum were broadly - and many glowingly - supportive of the clinical benefits of the impending change, and particularly of the electronic records system which tracks all treatment from primary care physician through the Island hospital to Massachusetts General, concerns were expressed about a potential clash of cultures.
Dr. Judith Fisher, a primary care physician who works for the Vineyard hospital, drew on her own experience in large hospitals where students and interns and others "came between me and the patient." She sought assurances that the educational and research burden on the Island would not similarly intrude on doctor-patient relationships.
"Here they really know you and they care what happens and that goes a long way. I wouldn't like to see it become impersonal," Dr. Fisher said later.
The forum went on for more than an hour, and was attended by about 60 people, including a contingent of hospital trustees and staff members. Cape and Islands Rep. Eric T. Turkington and state Sen. Robert O'Leary attended, along with former state Sen. Henri Rauschenbach, who now works in the private sector as a lobbyist with Partners Health Care as one of his clients.
Public comment reflected little doubt that the level of clinical care would improve under the agreement, but there were questions about the degree of autonomy of the local hospital in the new arrangement, the cultural values of the new big partner and its commitment to community services.
Assurances were given, but skepticism and caution kept coming through.
Tad Crawford, a member of the Dukes County Health Council, said he had no real objection to the affiliation, but raised a number of questions about how things will work, especially with ancillary health care groups such as Martha's Vineyard Community Services and the Visiting Nurse Association.
"I guess if you're hearing crusty questions," Mr. Crawford said, "it's a measure of how important the hospital is in the eyes of the public here. There are really two lifelines for us. One is the Steamship Authority and the other is the hospital."