Medicare crisis
Medicare has entered a crisis – and it has dragged hospitals and health plans along with it.
The federal health insurance program which serves 39 million elderly and disabled Americans will go broke as early as 2008, and that’s after Congress in 1997 passed the Balanced Budget Act which extended the life of the Medicare Trust Fund so it would last into the next millennium.
In saving Medicare, however, Congress has been devastating hospitals and health plans. This is especially true in states which have high concentrations of Medicare beneficiaries, such as Rhode Island. Sharp cuts in federal Medicare reimbursements have already caused hospitals that have never had layoffs to cut staff and reduce services.
Meanwhile, health plans are now making business decisions to pull out of markets that are no longer profitable. For example, Harvard Pilgrim Health Care soon will end its Medicare services in several Western Massachusetts counties.
Health plans, however, helped create the current state of affairs. Before 1997 they competed heavily to sign up seniors by offering services that traditional Medicare does not cover, such as eyeglasses and prescription drugs. The war for seniors prompted many to offer these services for little or no extra cost.
Meanwhile, many experts say health plans benefited from a system that overpaid them before 1997, since Medicare’s reimbursement system did not account for HMOs’ tendency to sign up the healthiest of Medicare beneficiaries. Health plans are also finding that costs are rising as more and more seniors join Medicare HMOs, making the Medicare population served by managed care more representative of the larger Medicare population.
Clearly, both sides should compromise. Congress must modify the ambitious 1997 Balanced Budget Act to correct its numerous unintended consequences – namely hospital layoffs and cuts in service – while health plans must shoulder some of the responsibility for their current problems.
Determining the best and fairest Medicare payment rate is an extremely difficult task. But the health care industry, policy analysts, and Congressional leaders will have to tackle it if they are to create a Medicare system that pays HMOs and hospitals adequately while remaining solvent well into the 21st Century.
Providence Place
Providence Place – all 1,310,000 square-feet of it – will open its doors Friday morning.
No, not all of the stores will be open – including Filene’s and Lord & Taylor. But they will be soon. Providence Place is no longer a blueprint; it is a reality.
The $450 million development has been a decade in the making. It is the single largest construction project in the state’s history and those who persevered to make it a reality deserve credit. Developer J. Daniel Lugosch could have easily given up at several points along the way. Clearly, his is a vested interest. But that only proves that he sees something in Providence and has for some time.
Providence Place will not make Providence. Providence made Providence Place possible. Now we suspect that both will win. The city will be a better place for Providence Place. It will attract more tourists. It will provide more jobs.
Providence Place — and the businesses that compose it — stand to capitalize on one of the most exciting cities in America.
We applaud the developers, bankers, politicians and laborers who have brought Providence Place to life.
We especially applaud Friedrich St. Florian, a professor of architecture at the Rhode Island School of Design and the design architect for the mall’s exterior.
How many of us worried when we heard of plans to build a huge mall downtown? But Florian drew from his heart and came up with a design that is now drawing rave reviews.
There are hurdles ahead. It will be interesting to see if Rhode Islanders will pay to park. It will be interesting to see how many out-of-staters find their way here. And it will be especially interesting to watch the impact of Providence Place on Rhode Island’s other malls and retail centers.
But make no mistake. Friday is a day for celebration. For Providence Place. And for Providence.
