Law Forces Cuts In Hospital Budgets

Though cost-cutting, staff attrition and "general tightening up." Harvard's affiliated hospitals insist that they can maintain their current level of patient services while staying within the bounds of the state's new hospital budget control law, administrators at eight of the 13 institutions said last week.

The law, Chapter 372 of the Laws of 1982, places a limit--set by the state Rate Setting Commission--on the amount of revenue a hospital can generate. If the hospital provides a total amount of services which exceed the limit, it must pay for those services out of its own budget--it is ineligible to receive the money from Medicare. Medicaid, private insurance and private fees. Any profits below the ceiling, however, revert to the hospital.

Paul T. Swoboda, a policy analyst in the bureau, said that the law was enacted so that hospitals would "increase efficiency by doing more with the same amount of dollars."

Hospital administrators said that while they can provide services at levels comparable to last year's, that will be more difficult in the future--when growth allowances will be made for inflation.

Budgets for fiscal year 1983, which began October 1, 1982, actually exceed the amounts spent in the previous fiscal year, but they fall short of the originally projected totals.

As a city hospital. Cambridge hospital budget will not reflect the effects of the law until its fiscal year begins July 1, but the institution is already "controlling salary and wage expenditures," said Michael J. Ryan, senior assistant director. Like the other hospitals contacted. Cambridge is not laying workers off.

At last night's meeting, the Cambridge City Council cited the law as one reason for its decision to rescind $625,000 from the hospital's budget.

"It's having a negative impact upon the hospital's well-being." stated Melvin H. Chalfen, commissioner of health and hospitals, in a letter.

Of all the affiliated hospitals Massachusetts General Hospital has made the largest cut in the budget, slicing $19 million from a projected $296 million, according to spokesman Martin S. Bender.

Mount Auburn Hospital has instituted a "vacancy review committee." said Miles Coverdale, vice president of finance. The hospital is now operating at 93 percent of its original budget of about $58 million, but Coverdale said he hopes to be able to "come in $3 million under budget."