Massachusetts General Hospital (Mgh) and Brigham and Women’s Hospital (Bwh)

635 Words3 Pages
Martha C. Beary Situation Two of the five prestigious teaching hospitals, Massachusetts General Hospital (MGH) and Brigham and Women’s Hospital (BWH), were looking into merging due to the affected changes in the U. S. Healthcare System. Their main intention was to reduce operating costs through the integration of clinical training programs. Areas of cost reductions included payment systems, healthcare network development, research, and at the same time, preserve the quality of their teaching programs and patient care. Problems The declining of bed utilization rates and the threat of primary and secondary services triggered drift to competing hospitals in the community. The changes in government programs such as Medicare caused a reduction of gross patient service revenue. Research funding was not covering 100% its own expenses, having to use clinical revenues to cover them and subsequently affecting education programs. Analysis Although well distinguished for their highly specialized tertiary and quaternary care, both hospitals faced similar rate drops in the percentage of utilized beds. BWH rate dropped from 88.7% in 1988 to 79.6% in 1993. At MGH the decline was 87.6% in 1988 to 78.4% in 1993 as well. Because of their high medical cost and lack of primary care physicians, 30% of the hospitals revenues were at risk, giving the opportunity to other hospitals to provide these services and create price competition based on Chapter 495. The reduction of gross patient service revenue at MGH and BWH were affected by the changes in government programs such as Medicare, Medicaid and the enactment of chapter 495. These programs along with many insurance companies adopted the Prospective Payment System (PPS) which began monitoring hospital charges and refusing payment for unnecessary services. The hospitals were receiving a standardized payment for each service

More about Massachusetts General Hospital (Mgh) and Brigham and Women’s Hospital (Bwh)

Open Document