BOSTON -- Massachusetts' 3-year-old experiment in health reform has been largely successful, with nearly half a million previously uninsured people now covered.

But a funding change outlined in the reform law dealt a difficult blow to some of the state’s biggest safety net hospitals, leaving the hospitals and some of the state’s most vulnerable patients in a precarious position.

Newscenter 5's Heather Unruh reported Wednesday that Boston Medical Center is one such hospital. Its emergency room is the busiest in the state, treating 130,000 patients annually.

“We see patients in pain so severe they're crying,” said ER chief Dr. Jonathan Olshaker. “We see patients every day coming in who have really been abandoned or turned down. We just say yes to everyone.”

Brian Rosman, research director at the Boston-based advocacy group Health Care For All explained the funding change.

“The goal was to move away from a block grant that went to hospitals that served low income and uninsured people into a claims based system where each hospital would be paid on an individual basis for each patient that they saw,” said Rosman.

The change has hit BMC’s bottom line. Unlike other big Boston hospitals, few patients at BMC have private insurance, meaning that BMC loses a lot of money on nearly a third of its patients.

“We collect 64 cents on the dollar that it costs us to care for them,” said BMC’s chief medical officer Dr. Ravin Davidoff. “And that’s just not sustainable.”

The long-time city hospital has tightened its belt in recently months, laying off 250 staff, cutting services, freezing many salaries and hiring. But despite that, when all is said and done, hospital officials tell NewsCenter 5 that this year's budget is falling short by more than $200 million.

“We're talking about a quarter of our annual budget,” said Davidoff. “And it's not a long time, two, three years, if we continue like this we will have no resources to provide this.”

Some expressed hope that federal stimulus money could be used to help bridge the gap. But in a statement to NewsCenter 5, the state department of health and human services said stimulus dollars are already being used, just to keep health care funding at the current levels.

State lawmakers and advocates agree the safety net hospitals in Boston, Springfield, Holyoke, Lawrence and other cities are vital.

Especially since the onset of the recession, the health care needs of low-income and uninsured residents has stayed strong. Safety net hospitals are filled to capacity, but with competition for state dollars stretched farther than ever, there are no simple solutions.

“The state's trying to stretch dollars that don't go far enough,” said Rosman. “It's hard to make ends meet for everything.”

BMC executives will continue pleading their case on Beacon Hill, hoping it can keep its doors open to keep one of the most vulnerable patient populations healthy.

“At this stage we are really just asking to be paid a dollar for a dollar,” said Davidoff.