Having done a fair amount of strategic planning for hospitals, I can understand Boston Children’s Hospital’s desire to expand beyond its historic patient referral network by acquiring out-of-state physician practices (“Children’s Hospital, Aetna to end contract next month,’’ Business, Jan. 22).
However, Children’s current battle with Aetna over reimbursement demands for those for-profit physician practices illustrates the potential downsides of such strategies. The hospital appears to be overreaching by trying to use the institution’s market clout with insurers to leverage better paydays for the doctors’ practices it now owns.
The downside of this aggressive strategy is the financial harm this could cause patients’ families who are covered by Aetna policies if their insurer no longer contracts for Children’s services. Such strategic initiatives should never be pursued at the expense of a hospital’s patients. It’s they to whom nonprofit hospitals owe their primary fiduciary duty, not distant physician groups seeking to enhance their incomes.
The fact that a recent report has found that Children’s has the highest-paid physician providers in Massachusetts only adds salt to this fiscal wound.
This may be an example of good strategy poorly executed. Or it may yet prove to be bad strategy that threatens to undermine the institution’s credibility and nonprofit bona fides.
Indeed, in the context of the hospital’s plan to eliminate its Prouty Garden, which David Richwine so touchingly opposed in the op-ed “Don’t erase a memory’’ in the same edition of the Globe, there seems to be some questionable decision-making underway at Children’s.
Maybe it’s time for another strategic retreat to rethink the hospital’s entire game plan, which should derive from its institutional mission more than its strategic ambitions. Because the current approach appears to be fraught with institutional arrogance that threatens to undermine Children’s longstanding and well-deserved reputation.
John Lynch
Hopkinton