At UMass Memorial Health, a worrisome diagnosis on the future of health care

Boston Globe

11 hours ago

With more than half of the hospitals in Massachusetts currently in the red, Alan Sager, a Boston University professor of health law, policy, and management, said the Medicaid cuts will only compound the difficult financial decisions many are already facing.
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'There will be program closures,' Sager said. 'There will be individual patients who don't get care because they lost coverage or because the program that served them was eliminated.'
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The dominant provider of medical care in Central Massachusetts, UMass Memorial treats some 500,000 patients a year, more than a quarter of them covered by Medicaid, the government health insurance for the poor and disabled. About one in 20 UMass Memorial patients are uninsured, which means the health system often has to absorb the costs of treatment, adding to the financial strain.
Dr. Eric Dickson, the UMass Memorial chief executive, said the recent program closures were made in part to offset recent financial shortfalls, but also were driven by the impending cuts to Medicaid.
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President Trump's signature legislation, the One Big Beautiful Bill Act, will slash nearly $1 trillion from Medicaid over the next 10 years, tossing up to 16 million Americans from health insurance program, according to the nonpartisan Congressional Budget Office. UMass Memorial estimates that 100,000 of its
patients are at risk of losing Medicaid coverage because of new eligibility and work
requirements.
President Trump signed his signature bill of tax breaks and spending cuts at the White House on July 4.
Evan Vucci/Associated Press
Prior to enactment of the law, Dickson said he believed he could manage the operating losses and return to profitability 'in a slow, thoughtful manner.' But the massive cuts to Medicaid mean UMass Memorial could no longer take a gradual approach.
'I went back to my board' of directors, Dickson recalled, 'and said. 'I've got to move hard and fast.''
The financial outlook has undoubtedly become darker for hospital systems such as UMass Memorial that care for high numbers of low-income and uninsured patients, said Karen Errichetti, an assistant professor of public health and community medicine at Tufts School of Medicine.
But Medicaid cuts are only one source of the instability.
Costs of labor, drugs, and medical supplies are up, while hospitals serving large low-income populations tend to operate on razor-thin margins.
Total expenses for hospitals in 2024 grew by 5.1 percent, well above outpacing the overall rate of inflation of 2.9 percent , according to the American Hospital Association's
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'UMass is a very important safety net hospital system within our state and has an important role to play in that larger community that needs a safety net,' said Errichetti. 'The things going on right now are a sign of broad pressures on safety net hospitals in general.'
Across the state, health systems have shuttered clinics offering mental health services, obstetrics, and primary care as they attempted to balance their budgets.
Between 2014 and 2023,
Protesters rallied against the planned closure of the labor and delivery unit at the UMass Memorial HealthAlliance-Clinton Hospital in Leominster on May 30, 2023.
Nathan Klima for The Boston Globe
Dickson said UMass Memorial as a whole is 'too big to fail,' because it treats so many people in Central Massachusetts. But non-emergency services, such as primary care or mental health programs,
could be at risk if its finances worsen.
Most recently, UMass Memorial said it will shut down a psychiatric day program for adults in Fitchburg as of Oct. 23. The program, call BUDD, for Builds Understanding and Develops Direction, serves about 30 patients, treating them for psychosocial, emotional, or behavioral issues and connecting them with social workers, psychiatrists, and rehabilitation counselors.
The BUDD program is operated by UMass Memorial affiliate Community Healthlink, which provides a range of services addressing mental health, substance abuse, and homelessness. CHL has served more than 14,000 people since since January 2024.
It also lost $10.4 million between October and March.
If losses continue to grow, Dickson said, he might be forced to shutter Community Healthlink
outright. It is among the most comprehensive providers of community-based mental health and substance use treatment in Worcester County, and its closure would ripple across the health care system.
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'What happens when you stop seeing behavioral health patients at CHL, you stop doing detox, you stop housing people with substance use disorder or working with families in crisis? Where do they end up going for care? The emergency department,' Dickson said. 'And my emergency departments are completely overwhelmed right now.'
Marin Wolf can be reached at