If you picked up the paper earlier this week, you may have seen an article in The Boston Globe about Massachusetts Senate President Therese Murray’s call for health care providers to contribute money to a $100 million fund directed toward easing the health care cost burden on small business. Partners Healthcare committed $40 million to the fund.
We commend the Senate President for her leadership role in offering pragmatic short- and long-term solutions to complex health care issues, and for proposing a way to relieve cost pressure on small businesses.
For the past two years, Children’s has taken an ambitious series of steps that have already significantly reduced health care costs across the delivery system. This year, we’ve decreased the prices of our medical services and reduced our rates to Massachusetts health insurers by a total of $33 million. We’ll be making more price cuts and rate reductions totaling an additional $10 million in the next six months. You may remember that in October, we announced a unique partnership with the state’s major health plans to accelerate efforts to improve health outcomes and reduce costs by eliminating care that is not effective and over utilized. This combined $43 million is a nearly a 4.5 percent reduction in what we get paid to care for our patients. This represents a deeper and more sustained reduction than what Partners has committed to. We also believe that our reductions should be passed on to all patients, not only one group.
Being able to offer these savings to insurers is the result of long-term fiscal discipline for the entire organization. Next year, we have targeted an additional $35 million in savings in our budget forecast. Most importantly, we’re doing this without sacrificing quality or safety. Given the complex needs of many of our patients, we must simultaneously improve the quality and safety of our care while reducing overall cost.
Finally, we remain committed to keeping a long-term focus on child health needs. We have a special opportunity before us, given our clinical and research base, to use our intense culture of innovation to find new ways to treat and cure pediatric diseases and congenital conditions. With the right approach, I believe we can create value far beyond our walls, over the course of generations.