Press Release  HPC EXECUTIVE DIRECTOR TESTIFIES BEFORE SPECIAL HEARING ON SOUTHEASTERN MASSACHUSETTS HOSPITALS

BOSTON — Massachusetts Health Policy Commission (HPC) Executive Director David Seltz testified today at a special hearing of the Senate Committee on Post-Audit and Oversight chaired by Senator Marc Pacheco (D-Taunton), State of Access, Affordability, Quality and Staffing of Hospitals in Southeastern Massachusetts, Cape Cod and The Islands. Director Seltz testified alongside Secretary of Health and Human Services Kate Walsh and Department of Public Health Commissioner Robbie Goldstein, along with a number of health care system leaders, providing an overview of the region’s health care landscape, market challenges, and current state oversight processes.

Director Seltz presented an overview of the unique capacity challenges in Southeastern Massachusetts. The region has experienced health care resource challenges in the last decade, including temporary and permanent community hospital and physician practice closures. The Southeastern MA Health and Medical Coordinating Coalition (HMCC) region is currently designated by EOHHS as Tier 3 under its hospital resurgence guidance, indicating high risk for or active constraints on hospital capacity.

Given that many of Steward Health Care’s patients live in Southeastern Massachusetts, these existing capacity constraints could be significantly worsened by any health care service disruptions resulting from Steward’s precarious financial situation. Southeastern Massachusetts is vulnerable to the impacts of such disruptions, with lower-than-average incomes in most regions and substantial health care affordability and access challenges. According to an HPC analysis of the Center for Health Information and Analysis’ (CHIA) Massachusetts Health Interview Survey, these include:

• A greater share of people in the Metro South, Southcoast, and Cape and Islands regions were uninsured in the past 12 months compared to the statewide average and to every other region in the state, with 3% uninsured in Metro South, 4.9% uninsured in Southcoast, and 3.4% uninsured in Cape and Islands compared to 2.4% uninsured statewide.
• A greater share of people in the Southcoast and Cape and Islands regions reported problems paying medical bills in the past 12 months compared to the statewide average and to every other region in the state. 19.6% of Southcoast residents and 13.7% Cape and Islands residents reported difficulties paying bills compared to 12.5% statewide.
• A greater share of people in the Metro South and Southcoast regions reported problems paying for prescription drugs in the past 12 months compared to the statewide average. 10.9% of Metro South and 9.6% of Southcoast residents reported difficulty paying for prescriptions compared to 7.9% statewide.

Alongside these affordability trends, Southeastern Massachusetts also has seen troubling health care workforce trends. With few exceptions, counties in Southeastern Massachusetts have fewer clinicians per capita than the statewide average across all specialties examined. Such workforce shortages contribute to delays in patient access to needed care and bottlenecks to timely transitions across care settings.

“These compounding challenges signal the need for collaborative action to ensure the stability of the health care landscape in Southeastern Massachusetts,” said HPC Executive Director David Seltz. “The HPC looks forward to continuing our partnership with the Healey-Driscoll Administration, the state Legislature, state agencies, and health care providers to address this situation and ensure equitable and affordable access to health care for all Commonwealth residents.”

A link to Director Seltz’s full presentation can be found on the HPC’s website.

Notice of Material Change Regarding Steward Health Care/Optumcare:

Director Seltz also discussed the Notice of Material Change (MCN) the HPC received regarding the proposed sale of Stewardship Health, Inc., the parent of Stewardship Health Medical Group, Inc., which employs primary care physicians and other clinicians across nine states, and Steward Health Care Network, Inc., a contracting network, to OptumCare, a subsidiary of UnitedHealth Group.

The HPC is committed to a thorough and timely review of this proposed transaction, which will examine potential impacts on health care costs, quality, access, and equity. The HPC has begun reviewing the proposal based on available information, however, key information from the parties is still outstanding. The MCN filing will not be complete until the HPC receives the information and documents necessary to conduct its preliminary review. 
 
The HPC has 30 days from the date a material change notice is complete to determine whether to conduct a more comprehensive review, called a Cost and Market Impact Review (CMIR). The transaction cannot be completed until after the HPC’s review and any concurrent review by state or federal antitrust authorities.

More information on the HPC’s role in market oversight, including timelines for review and details on Material Change Notices (MCNs) and Cost and Market Impact Reviews (CMIRs), can be found in this overview.

HPC Policy Recommendations to Increase Oversight and Transparency of Private Equity Investment in Health Care, and Support Health Care Workforce:

Enhance health care market transparency and oversight through the HPC’s current authorities.

Enhance public transparency and oversight by amending the HPC’s Material Change Notice process to capture a broader range of transactions, reflecting emerging market trends, including:

• Substantial changes in capacity
• Significant investment by private equity or for-profit in an existing health care provider
• Substantial sale of assets for an ownership share or for the purposes of a lease-back arrangement

Amend the HPC’s Registration of Provider Organization (RPO) program to:

• Include public payer revenue in the reporting threshold. This change will expand the type of entities that must file with the RPO program to include sectors frequently targeted by PE firms and provide more public insight into the structure and financial health of provider organizations
• Establish enforceable penalties for non-compliance to ensure all required information is provided in timely manner

Align state regulatory tools and enhance monitoring of health care resources.

Recent health care market activity, implicating both access and cost, have highlighted the opportunity to better align the range of state agency oversight processes and the need for a better understanding of the allocation of health care resources across the Commonwealth. The HPC recommends the Commonwealth should conduct data-driven assessments of service supply and distribution based on identified needs.

Consider additional state authority to approve or deny transactions, or impose conditions, to mitigate potential harms.

Similar to other states such as Oregon, further empower state oversight authorities (e.g., HPC, DPH, AGO) to ensure all proposed transactions are consistent with state goals on cost, quality, access, and equity (not limited to PE transactions). Potential conditions of approval could include: 

• Efforts to maintain or enhance access to needed services,
• Quality standards and improvements,
• Ongoing financial and compliance monitoring including on staffing, and,
• Conditions on exit or sale.

Support and Invest in the Commonwealth’s Health Care Workforce.

The state and health care organizations should build on recent state investments to stabilize and strengthen the health care workforce, including:

• Offering financial assistance to ease the costs of education and training, minimize entry barriers, and explore policy adjustments for improved wages in underserved sectors,
• Adopting the Nurse Licensure Compact to simplify hiring from other states, and
• Health care delivery organizations should invest in their workforces, improve working conditions, provide opportunities for advancement, improve compensation for non-clinical staff, and take collaborative steps to enhance workforce diversity.

A recording of the hearing can be found on the Post-Audit and Oversight Committee’s website. The HPC’s presentation materials from the hearing and corresponding policy recommendations are available on the HPC’s website.

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