Boston Children’s Hospital.
A Partners HealthCare managed-care unit, Neighborhood Health Plan, has changed its contract in such a way as to result in restricted access to specialists at Boston Children’s Hospital, The Boston Globe reports.
Neighborhood officials said the controversial change was made because it can’t afford Children Hospital’s rates.
According to hospital executives, Children’s does provide care to children on Medicaid. The hospital loses at least $100 million a year because not all costs are reimbursed, according to the report.
The change of policy comes as Children’s has decided to move forward with a controversial $1.5 billion expansion plan that involves will include building over the Prouty Garden, long a beloved refuge for sick and dying children and their families.
In a spectacular example of how health systems are expanding and seeking ways to integrate and cross-promote physician groups and hospitals, Boston Children’s Hospital plans to buy Children’s and Women’s Physicians of Westchester (N.Y.) LLP, in what would be the hospital’s first acquisition outside Massachusetts. Terms were not disclosed.
The physician group is for-profit, the hospital a not-for-profit.
The Westchester physicians see a lot of business coming from uniting with a world-famed institution. The hospital, for its part, sees a mighty flood of well-insured referrals coming from this marriage. The Westchester group has a total of 276 physicians in New York, Connecticut and New Jersey area, many of them affluent suburban patients with generous insurance.
The Boston Globe noted:
“The hospital already treats many patients from other states and countries, but this is its first acquisition outside Massachusetts. The deal will add thousands of patients to the Children’s network and advance the hospital’s out-of-state expansion strategy; last year Children’s earnings rose on increased business from international patients.”
Boston’s Children’s Hospital reported that it earned $113 million on operations in the fiscal year that ended Sept. 30 — a 28 percent jump from the year before.
“The growth was fueled largely by international patients: Revenue from these patients soared 47 percent from last year, nearly six times the pace of revenue growth from local patients,” The Boston Globe reported.
Children’s has increased marketing abroad in recent years to attract new international business.”
As with Ivy League and other prestigious parts of American higher education, prestigious teaching hospitals such as Boston Children’s are in a strong position to lure affluent foreigners who can pay full freight. This business can offset some of the losses from serving American patients. But the vast majority of American hospitals, of course, lack that allure.