State Pays Hospital $1.6M

The Commonwealth of Massachusetts last week delivered $1.6 million of the $7.25 million it owes to the Cambridge Hospital, two councillors said at a City Council meeting last night.

Councillors William H. Walsh and John O'Brian, the hospital's chief administrator, told councillors that the payment is the first of several that will provide the Cambridge Hospital with the majority of the money it is owed by July 1. O'Brian said he is expecting another $2.4 million from the state by mid to late June.

Despite the payments, the hospital will still have a deficit of almost $7.6 million for the current fiscal year, O'Brian said. If cuts in aid to hospitals on the state level continue, the hospital deficit could reach $10 million by the end of next year, he added.

The hospital is the city's third largest source of income, and increases in its deficit could lead to tax hikes, according to a budget report prepared by City Manager Robert W. Healy.

At an April 10 meeting, the council voted to extend an invitation to Gov. Michael S. Dukakis to discuss the current deficit, which includes unreimbursed Medicaid and health care pool payments from the state.

If the state did not respond by May 1, the council, at the urging of Walsh, planned to initiate legal action against the commonwealth to obtain the money for the hospital. Walsh also said he might ask Harvard to loan the city the funds.

Walsh said Councillor Sheila Russell had approached President Derek C. Bok about Harvard's helping the hospital--one of 15 teaching hospitals affiliated with the University--with its deficit.

Harvard owns approximately 6 percent of the public land served by the hospital, Walsh said. Bok told Russell he would consider the proposal, he said.

L. Edward Lashman, secretary of the State Office for Administration and Finance, described to the council the state's current fiscal situation, as well as the steps the government is taking to alleviate the debt it owes to Cambridge.

"The fiscal situation in the commonwealth is really a healthy one," Lashman said, referring to the state's numerous programs to aid the elderly and needy. "So what's our problem?"

He said tax cuts up to $700 million resulted in the state taking on much of the burden for these programs itself. Despite additional cuts in aid to health and welfare programs, however, the state budget is still over $150 billion off balance, Lashman said.

"I would most respectfully ask for your patience as we work this out, and I think we'll be able to find a solution to the problem," he said.

Lashman testified that the state budget as drafted by the state House of Representatives drastically cuts local aid. The projected budget for cities throughout Massachusetts is $34 million lower than the current budget, he said.

Members of the council also placed some blame on the federal government for its cuts to state and local aid for health care.

"I think somebody has to say that the state cannot take full responsibility for the things the federal government has so blithely discarded," said Councillor Francis H. Duehay '55.