Mayor for a New America (24 page)

Over the next three years Boston ran an experiment with lessons for post-Washington America: Unable to go into deficit by cutting taxes or increasing spending, the federal cures for recessions, can a city government stimulate prosperity on its own?

Politically, Boston was testing a proposition stated by a local authority on “urban affairs”: “Mayors just aren't important anymore.” We'd see about that.

The week before the 1993 election, looking back on my months as acting mayor and ahead to my first term, I said: “We have taken positive action in virtually every area of government affecting people's lives. . . . Come November 3rd—the day after you elect me as mayor—the city of Boston will begin a new era in which the needs of families are given the highest priority.” Participation in a growing economy was among the highest priorities for Boston families.

“If we can create an economic climate in the city that creates jobs,” I said after taking office, “a lot of other problems in the city will take care of themselves.”

 

The mantra of city economic strategy should be: Build it and they will work. Buildings create jobs. Blue-collar jobs in constructing them. White-collar jobs when they are finished.

Consider this: Between 1947 and 1964, only 27,745 jobs in financial and professional services were created in Boston. Between 1964 and 1968, Boston gained 32,000 such jobs. That's more jobs in four years than in the previous seventeen. Something changed in 1964. What? The Prudential Tower, Boston's first skyscraper, was completed. Build it and they will work. (During my tenure, Boston added the equivalent of a new Prudential Tower every other year for a total of 13 million square feet of office space.)

Clinton's turn toward deficit reduction lowered interest rates. That encouraged developers to borrow and build. But they could build anywhere. Why in Boston? I had to show them. How? First, by erasing a question mark over the city's fiscal future. Second, by launching a major project to generate economic activity.

 

. . . the most important thing I will do as mayor.

 

—from a City Hall press conference in April 1996

 

Starting in the 1970s, 128 cash-strapped cities, including Kansas City, St. Louis, Detroit, and Philadelphia, closed their public hospitals. By 2005, 40 percent of the country's remaining public hospitals were predicted to follow them. That wasn't an option in Boston. Not with me as mayor.

Boston City Hospital was a precious social legacy. Established to fight cholera in the nineteenth century, built up to serve the poor by James Michael Curley in the twentieth century, by the dawn of the twenty-first century BCH was in trouble. To save this great public hospital, I had to privatize it.

To progressives, “privatize” is an ugly word. Government is about helping people, not making money from helping them. That was my belief. Still, to preserve its mission for the new century, I had to risk being remembered as the mayor who sold “the City.”

My first month in office I toured the new $170 million Boston City Hospital. It had taken ten years to build and even before admitting its first patient was obsolete. Yet, to pay off its FHA mortgage, Boston was on the hook for $20 million a year for decades. Closing it made no economic sense.

Changing patterns of health care were working against BCH:

• With fewer illnesses requiring hospital stays, hospitals were competing for a shrinking number of patients.
  
• Competition was intense in Boston, the health care capital of America, where major independent hospitals were merging.
  
• As they merged, they offered more comprehensive procedures, becoming more attractive to insurers and HMOs competing to offer customers total care.
  
• Under national health insurance—then “Clintoncare”—instead of being “steered” to public hospitals, the poor would be enrolled in health care plans specifying which hospitals to use. Compared to the merged private hospitals, BCH had little to offer those plans. It would lose its patient base to the private competition.
  

 

In March 1994 a commission on the future of BCH recommended merging it with its next-door neighbor in the South End, Boston University Medical Center Hospital, and that “dramatic reductions be made in costs in order to save the municipal hospital.”

How would it work? I asked. No one could tell me. Public hospitals had been shut. Some had been sold. None had been merged with a private hospital. We'd be stepping off into the public policy void. The merger was what I called it—an opportunity for “Boston to make history.”

I appointed former state senator Patricia McGovern to lead a second commission to coordinate the merger. “The commission's job is to get the two hospitals to the altar and actually perform the ceremony,” the
Globe
commented. “Within two years, and preferably sooner, the hospitals are to consolidate—merge, unite, become one—legally and operationally. . . . Everyone understands that huge difficulties complicate such a drastic move.”

“The biggest obstacle to this merger are the unions,” I said. BCH was heavily unionized, University Hospital less so. “We have to make [the unions] understand what happens if we can't do the merger. I understand there is fear that jobs will be wiped out. We'll do the best we can to preserve as many jobs as we can. But if we don't do it, we may lose
all
the jobs.”

“Market forces dictate the need to merge if the two hospitals are to remain viable,” said Sam Tyler, director of the Boston Municipal Research Bureau, an independent budget watchdog. “Either one cannot survive standing alone.”

The numbers told the story. BCH admitted 14,000 patients annually and University Hospital 10,000. Only as a single hospital with 24,000 admissions could it compete with Boston hospitals admitting 20,000 to 35,000 patients.

A second obstacle was the difference in the “client groups” served by each institution. Less than 50 percent of the patients at University Hospital were from Boston, compared to 90 percent of BCH patients. Five percent of University Hospital's patients were poor and only 4 percent were uninsured. Many of BCH's patients were poor and 45 percent were uninsured.

Treating patients regardless of their ability to pay, BCH provided half the indigent care in Boston, and a quarter of it in Massachusetts. Would the merged hospital continue that mission? Would it serve Boston residents or suburbanites? The merger's announced purpose was to cut costs, but could that be achieved without cutting services to those needing them the most? Yes, yes, and yes, we answered critics who raised such questions. But with no experience to guide us, how could we be sure?

A third obstacle was the public relations embarrassment that BCH had a $4 million surplus for 1993 while University Hospital showed a $9 million loss. If BCH was doing so well, why merge it with its failing neighbor? The unions pushed that talking point hard. But by the end of the century, BCH was expected to run an operating deficit of up to $7 million. And every 1 percent drop in patients would add another million. That was one of my talking points. After a year of exposure to the arguments, the public was moving toward support of the merger. I'd been mayor long enough for people to take my measure. They trusted me not to sell out the poor.

 

To survive, hospitals need patients. So when eight Boston community health centers representing 200,000 patients agreed to make the new merged hospital their principal affiliation, it was a huge step forward. We outbid the private hospitals competing for their patients, promising to contribute $6 million to the health centers for “capital improvements.” University Hospital was led by Elaine ­Ullian, a longtime friend. We easily agreed to kick in $3 million each.

The proposed merger had an unexpected dividend: Standard & Poor's awarded Boston its best-ever credit rating. “We thought the highest risk for the city would be to do nothing with City Hospital,” an executive from S&P's Boston office explained. “Clearly they are taking steps to avoid being left in a difficult position with no options.” The merger was not about constructing new buildings; but acting today to fix tomorrow signaled that my administration was businesslike and development-friendly. Over the next decade the high bond rating helped the city refinance $600 million in debt, saving taxpayers nearly $35 million and lowering borrowing costs for road repairs, new buildings, and other capital improvements.
^*

So much for the good news of 1995. My commission delivered the bad news: A private corporation had to manage the hospital “to free [it] from civil service rules, city purchasing requirements and much red tape.” Otherwise costs could not be contained. BCH's 131-year history as a public institution was over.

It was a “gotcha” moment for the unions, who had been warning that in any merger “the City” would be swallowed up. The signs members carried at demonstrations—
KEEP THE PUBLIC IN HEALTH CARE
and
STOP THE HOSTILE TAKEOVER OF BCH
—had a new bite.

 

The merger required City Council approval. Appearing before the committee considering the merger, I spoke with feeling. “The hospitals that resist change, that fail to remain competitive . . . simply will not be in operation at the start of the twenty-first century,” I told the councilors. “Let's protect our hospitals from that horrible fate. The people who need them deserve better than that.”

The unions were lobbying the councilors to reject the merger unless stronger labor protections were written into it. So to win the vote in the council, we had to win over the unions.

Three days of face-to-face talks around the conference table in the brick-walled meeting room of the Parkman House, a converted carriage barn, brought us close to an agreement. The union heads at the table knew the score. The merger would cost jobs—most, but not all, by attrition. But nothing like the nearly four thousand people who stood to lose their jobs if the merger failed. BCH was Boston's largest employer of minorities. They would lose the most jobs.

My chief of staff, David Passafaro, chaired the sessions. From time to time I stopped by to take the temperature of the room. On the third evening it felt chilly. So I put on a show.

I stood up and, with a swinging hand, swept papers and pencils off the table. I yelled, cursed, and grew red in the face. I said I was tired of the pettiness and the bellyaching. Sick of the speeches and the posturing. It was now or never. Then I took off my watch, slapped it on the table in front of Passafaro, and barked in my General Patton voice: “It's nine o'clock. If you don't have a deal in two hours, I'll go on the eleven o'clock news and denounce the holdouts. David, call me when it's done.”

I stormed out of the room, through the long hallway, and down the spiral staircase to the front door. David ran after me. He was afraid I had lost it. Hell, no, I said, when he caught up with me at the front door. It was an act. He started up the stairs. “I want that watch back,” I said, and slammed the heavy door behind me.

A deal was struck at three
A.M.
By a vote of 10 to 3, the City Council approved the merger. It added language to the agreement creating a commission to monitor the merged hospital's care for the indigent. Every year the city would convene a public meeting to hold the hospital to that mission.
^*

I vowed to drive a hard bargain with the merged hospital (now Boston Medical Center) “to make sure the mission stays the same.” The city's subsidy to BMC—$56 million over its first five years and $12 million annually after that—gave me leverage.

“The poor, the homeless, children, elders, the uninsured will not go without appropriate health care while I'm mayor,” I declared at an April 1996 City Hall press conference announcing that the two hospitals would operationally become one in July. The merger, I said, was “the most important thing I will do as mayor.”

 

Today Boston Medical Center employs nearly six thousand people. Twenty-five percent live in Boston. Forty-five percent are racial or ethnic minorities. Seventy percent are represented by unions. BMC serves 150,000 low-income patients a year, 65 percent from the poorest Boston neighborhoods. I could tick off its awards, praise its researchers, describe its efficient operation—it finished 2012 with a surplus! But what moves me when I think of BMC is its Grow Clinic, a national model for treating children diagnosed with “failure to thrive,” a heartbreaking condition associated with malnutrition, poverty, and family stress. The clinic treats two hundred kids at a time. It saves their lives. It gives them a future. Knowing I helped make that possible fills me with pride.

 

I spent nearly $1 million on Irish consultants.

 

—Robert Kraft, owner of the New England Patriots

 

A historian of bad ideas could trace the “Boston megaplex” to a spring day in 1992 when Massachusetts governor Bill Weld dropped by the Toronto SkyDome, home of baseball's Blue Jays. The tall redhead stood on the pitcher's mound, wound up, and threw an imaginary strike.

“To his companion, state Secretary of Economic Affairs Stephen Tocco,” Joan Vennochi reported in the
Boston Globe
, “it seemed the governor was basking in the echo of cheers from countless . . . fans.”

Perhaps he dreamed of taking a bow in the first game played in the WeldDome. Why not? Weld's family dated from the founding of the Bay Colony. His name was on a Boston street. It could be on a Massachusetts town. It belonged on a stadium. He was a ruddy-faced sportsman who hunted boar and caught trout, but after his perfect pitch under the SkyDome, it was Weld who was hooked.

Weld's dream harmonized with the ambition of James Orthwein, then the owner of the New England Patriots football team. The Patriots played in suburban Foxboro in a small rented stadium. Orthwein wanted them to play in Boston (where the franchise began in the early 1960s), in a bigger stadium built by the public. But the taxpayers wouldn't pay for a stadium used ten or twelve times a year. So Orthwein came up with some inspired packaging: Attach a stadium to a convention center in a megaplex, and to make it mega-mega, throw in a new baseball park for the Red Sox.