Boston skyline, including Massachusetts General Hospital
The bitter political battle over a proposed expansion of Massachusetts’ largest and most expensive hospital system underscores the question of whether a similar expansion of the nation’s largest health system could drive up health care costs.
Mass General Brigham, which has 11 hospitals in the state, is proposing a $2.3 billion expansion that includes a new 482-bed tower at its flagship Massachusetts General Hospital in Boston and an additional 1 at Brigham and Women’s Faulkner Hospital. 78-bed tower. The most controversial element, however, is the plan to create three comprehensive outpatient care centers in three suburbs west of Boston, offering physician services, surgery and diagnostic imaging.
On Jan. 25, the state’s 11-member health policy committee unanimously concluded that the expansions would increase spending by commercially insured residents by as much as $90 million a year and raise health insurance premiums.
The committee also ordered Mass General Brigham to develop an 18-month “performance improvement plan” to slow its cost growth. The action is believed to be the first in the country to require hospitals to develop plans to rein in costs, reflecting concerns over the role of large hospitals in rising healthcare costs.
Other states, including California, Delaware, Oregon, Rhode Island and Washington state have created or are considering creating a health care cost committee with the power to analyze the market impact of mergers and expansions. This happens because in the current era of health system giants, the traditional “needs determination” process for approving health facility expansions (still in place in nearly 30 states) doesn’t work. Maureen Hensley-Quinn, senior program director at the National School of Health Policy.
Mass General Brigham Health System, with annual revenue of $15.7 billion, announced a major expansion to better serve existing patients, including 227,000 living outside Boston. its leader says The new facilities won’t increase health spending in the state, and policymakers fear cost increases of 4.3% in 2019, surpassing the state’s 3.1% target.
hospital’ Cost Analysis ReportA submission to the state government last month concluded that the system’s existing patients would pay less at the new suburban site than its inner-city location. John Fernandez, president of Mass General Brigham Integrated Care, expects prices at the new center to be 25 percent lower, saying patients will not have to pay additional hospital “facilities” at the new outpatient locations.
“Given the aging population, we’re going to have a huge number of patients over the next 20 years, and everyone has to step up to meet that demand,” he said in explaining the expansion.
but a well-funded alliance Representatives of competing hospitals, unions and chambers of commerce argued that General Brigham’s invasion of the Boston suburbs would boost overall spending by attracting lower-priced doctors and patients to the hospital.They cite projections from the health system’s own plan, which is set by the attorney general’s office in November report, the expansion will increase annual profits by $385 million.
“How could you be deceived?” said Dr. Eric Dixon, CEO of UMass Memorial Health Care, a safety-net health system serving towns west of Boston and part of a coalition of expansion opponents. “If you let the most expensive system in the state grow like crazy, it’s going to drive up health care costs.”
The controversy marks a shift in concerns about the reasons for rapidly rising health care costs. So far, state and federal policymakers studying how hospital system growth affects costs have largely focused on hospital mergers and purchases of physician businesses.The study found that these transactions Sharply boosted prices Consumers, Employers and Insurance Companies. State and federal regulators have stepped up antitrust scrutiny of mergers.
Deep-pocketed hospital systems are increasingly Move to Solo Expansion to gain a larger market share. These expansions are beyond the legal purview of antitrust enforcers.
Health systems are building satellite outpatient care centers to attract more insured patients and direct them to their own hospitals and other facilities. Glen Melnick, a health economist at the University of Southern California.
“The outcome is the same as consolidation — catch patients and keep them,” he said. “It’s not necessarily good for consumers in terms of access to care or cost efficiency.”
Critics of Mass General Brigham’s plan also warned that the expansion would financially undermine providers that heavily serve low-income and minority residents as some of their wealthier patients move to new facilities. Commercial insurance plans for these patients pay nearly three times what the state’s Medicaid program pays.
“This is a very, very good business move for MGB,” said Dixon, whose system Serves a large percentage of Medicaid patience. “But they are well aware that this will affect our ability to care for vulnerable people.”
The Health Policy Committee agreed with those opposed to the expansion and said it would inform the state’s public health board — which has until April to decide on three expansion applications — that the proposals are inconsistent with the state’s goal of containing costs.
“Our strong assessment is that this will significantly increase spending,” said Stewart Altman, Professor of Health Policy at Brandeis University and Chair of the Committee. In addition, “there is a clear sign that it will reduce the revenues of those institutions we look to serve low-income and historically marginalized communities.”
In a written statement, VW General Brigham tore up the committee’s findings, saying it was flawed. It also disagreed with the committee’s decision to call for a cost improvement plan, but said it would work with the agency to address the challenge.
Based on Massachusetts Needs Determination Procedures, Mass General Brigham must show The Public Health Commission said its expansion proposal would help the state achieve its goals of cost containment, improved public health outcomes and a transformation of the delivery system.
In its nearly 50-year history, the commission said it had never blocked a project on the grounds of cost. PhD.Paul Hatties Former member of the Health Policy Committee. He argues that Massachusetts needs clearer statutory authority to decide whether an expansion of the health care system is good for the public, because he doesn’t think the commission understands its own rules.
One Bill passed Last fall, the Massachusetts House of Representatives will give greater powers to the committee, which was created in 2012 to investigate the cost and market impact of such an expansion. Its legislative fate is uncertain.
Up the stakes in the Massachusetts expansion fight: Massachusetts General Hospital charges by far the highest in the state, with Brigham and Women’s Hospital a close second.
Mass General Brigham primary care physicians had the highest per patient spending in 2019 at nearly $700 per month, According to the Health Policy Council. That’s 45% higher than what Reliant doctors, part of UnitedHealth Group’s Optum division, spend on serving patients.The average cost of major outpatient surgery at Massachusetts General Hospital and Brigham and Women’s Hospital is nearly twice as tall Like the state’s lowest-income high-volume hospital.
Photo: Denis Tangney Jr, Getty Images
