Boston-area hospital chain in big financial trouble

A group of publicly-funded hospitals which form a key part of the Boston area's healthcare network is facing huge financial losses, and could end up eliminating as much as 9 percent of its workforce in an effort to stabilize itself. The chief administrative officer of the health system's physicians' group predicted a potential loss of $25 million to $35 million for the year. Cambridge Hospital alone has lost $13.2 million in the first six months of the fiscal year, and could lose $26 million for the year.

The alliance, which includes Cambridge Hospital, Somerville Hospital and Whidden Hospital, says that it's being sapped by the state's new healthcare reform law. The new law forces the hospitals to provide free care for the uninsured while cutting their reimbursement for these services. 

Before healthcare reform took effect in 2007, the Alliance was reimbursed in full for indigent care, but now the system gets only 60 to 70 percent. Meanwhile, admissions dropped 3 percent, and patients kept overnight for observation (which pays less) grew by 48 percent.

To learn more about the system's financial situation:
- read this piece from The Boston Globe

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