Budget Cuts Hit Healthcare

Some of Cambridge’s most vulnerable populations—the mentally ill and the elderly—will soon face a dramatic reduction in health services as a result of major budget cuts to the Cambridge Health Alliance, Dennis D. Keefe, the Alliance’s CEO, told the City Council in a roundtable meeting last night.

The state announced last week that it would not provide $55 million that the Alliance had been expecting in state revenue for the current fiscal year.

“With two thirds of the year remaining, it will require draconian measures to meet this,” City Manager Robert W. Healy said.

At the meeting, Keefe explained that it would be impossible for CHA to absorb such extensive budget cuts—equivalent to about 20 percent of CHA’s annual revenue—for the current fiscal year.

The state’s budget cuts call for withholding $200 million in Medicaid reimbursements from healthcare providers; $40 million of those reimbursements had been allotted to CHA. Other state budget reductions in the areas of education and healthcare management will cut a further $15 million from CHA.

The future of funding for CHA is also up in the air, because the currrent agreement between Massachusetts and the federal Centers for Medicare and Medicaid Services for the next five years does not include a provision for the Alliance.

Keefe said that he would meet with State Secretary of Health and Human Services JudyAnn Bigby tomorrow to try to appeal the state cuts.

CHA is a public hospital system that has several locations in the northern Boston metropolitan area. Many of its services are aimed at low income patients, including 150 beds to serve psychiatric inpatients and substance abuse recovery services, according to Keefe. The Alliance had already been facing financial woes. It cut discretionary spending in February and is in the process of laying off 9 percent of its workforce, or approximately 300 people.

Service cuts had also begun even before last week’s announcement; earlier this month, CHA said it would close the Oliver Farnum Senior Health Center in December, and in the spring CHA reduced the number of its sites that provide midwifery services.

“What do you say about a public health entity that starts its cutbacks on women and the elderly?” said Joan D. Hill, a retired Harvard employee and one of the dozens of senior citizens who filled the audience during the meeting.

Mark R. Finucane, a health science advisor who has been working with CHA said the Alliance would try to maintain its commitment to underprivileged populations by preserving the most utilized programs. Earlier this year, CHA hired Finucane and the firm Ernst and Young to create a strategic plan that would address its financial problems. But progress on that plan was “scrambled” when the state announced the additional cuts, Finucane said.

There will be a community meeting on Nov. 6 to allow residents to comment on the strategic plan that CHA is developing.

—Staff Writer Sarah J. Howland can be reached at showland@fas.harvard.edu.