Press Release  HPC FINDS MASS GENERAL BRIGHAM COST TRENDS AND EXPANSIONS THREATEN STATE HEALTH CARE AFFORDABILITY EFFORTS

BOSTON — Today, the Massachusetts Health Policy Commission (HPC) determined that Mass General Brigham (MGB)’s health care cost trends raise significant concerns and, unless addressed, are likely to continue to impact the state’s ability to meet the health care cost growth benchmark. As a result, the HPC took action to hold MGB accountable under state law, voting unanimously to require that MGB develop and implement a performance improvement plan (PIP) that will result in meaningful, cost-saving reforms. This is the first PIP to be required from a provider or health plan by the HPC. An overview of the PIP process and materials from today’s meeting, including the slide presentation, are available on the HPC’s website.

The HPC’s Board also took separate action, voting unanimously to issue a public comment detailing its analyses of three expansions proposed by MGB currently under review by the Massachusetts Department of Public Health (DPH)’s Determination of Need (DoN) Program. MGB includes two renowned academic medical centers and is the largest and generally highest-priced system in the Commonwealth. MGB is seeking to spend nearly $2.3 billion in Massachusetts on expansions and improvements at two of its hospitals and on the creation of three new ambulatory sites the communities of Westborough, Westwood, and Woburn. The HPC’s analyses found that these expansions would increase commercial health care spending by at least $46 million to $90.1 million and result in higher commercial insurance premiums for Massachusetts residents, families, and businesses.

The HPC also highlighted the potential for significant impacts to health care access and equity as care shifts to MGB providers from other providers in Massachusetts, with other providers anticipated to lose $153 million to $261 million in commercial revenue each year. These other providers have fewer financial resources and lower average prices for commercially insured patients, and they generally serve larger proportions of MassHealth patients and communities with higher indicia of social need than MGB.

Based on these findings, the HPC concluded these expansions are inconsistent with the Commonwealth’s health care cost containment goals.

“Mass General Brigham has a spending problem,” says HPC Chair Dr. Stuart Altman. “Its spending performance and plan for new expansions at their flagship hospitals and into the Boston suburbs raise significant concerns, as documented by the HPC today. In fact, continuing in this manner is likely to impact the state’s ability to meet its spending benchmark and could do serious harm to the structure of the state’s delivery system.”

HPC Public Comment on Mass General Brigham Determination of Need Applications

Today, the HPC issued a public comment on Mass General Brigham’s Determination of Need applications for significant expansion, renovation, and improvement of Massachusetts General Hospital and Brigham and Women's Faulkner Hospital, as well as the creation of three new ambulatory sites in the communities of Westborough, Westwood, and Woburn. In total, the three applications propose a capital expenditure of $2.25 billion in Massachusetts.

The HPC found that the projects would be likely to:

• Result in increased health care spending, likely $46.0 million to $90.1 million for the three projects per year for commercially insured patients, with approximately $9.3 to $27.9 million due to the proposed ambulatory expansion, $6.4 to $7.9 million due to the proposed Faulkner Hospital expansion, and $30.3 to $54.4 million due to the proposed Mass General Hospital expansion;
• Drive substantial patient volume and revenue to the higher-cost MGB system, particularly commercially insured volume, and likely away from other lower-cost providers; and
• Negatively impact market functioning, including health care access and equity, as a substantial amount of commercial revenue is likely to shift to MGB and away from other provider systems that have fewer financial resources, lower average prices for commercial patients, and generally serve larger proportions of MassHealth patients and communities with higher indicia of social need.

The HPC’s findings and conclusions stand in contrast to those of Independent Cost Analyses (ICAs) that were conducted by a third-party vendor (released on December 28, 2021), which conclude that all three projects are consistent with the Commonwealth’s cost containment goals. As outlined in the HPC’s comment, the ICAs fail to address certain major drivers of spending for the three projects, particularly for the ambulatory projects, minimize significant cost impacts in their own findings, do not consider important and relevant publicly available information, and do not consider key context about the current state of the health care market in Massachusetts.

A full copy of the HPC’s comment, including more detailed findings, is available on the HPC’s website.

HPC Requires its First Performance Improvement Plan

The HPC Board also finalized the confidential review of health care providers and health plans that experienced an excessive increase in health care spending at today’s meeting. During the executive session, commissioners voted to require a performance improvement plan or PIP for one of the entities under review, MGB.

A thorough examination of MGB’s spending trends found that from 2014 to 2019, MGB has had more cumulative commercial spending in excess of the benchmark than any other provider, totaling $293 million. The Board noted that MGB’s ongoing cost-control strategies do not appear to have reduced its commercial spending growth to below-benchmark rates.

MGB has 45 days to file a proposed PIP with the HPC, request a waiver from the requirement to file a PIP, or request an extension of the filing deadline. The proposed PIP must contain specific cost-reducing action steps, savings goals, process and outcome metrics, timetables, and supporting evidence, among other requirements. More information on PIPs, including timelines and next steps, can be found on the HPC’s website.

The HPC will post further information on its website about the proposed PIP as implementation and its reporting requirements proceed.

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