Press Release  NEW HPC REPORT HIGHLIGHTS INCREASED CONSOLIDATION IN PEDIATRIC HEALTH CARE MARKET

BOSTON — Today, the Massachusetts Health Policy Commission (HPC) released a new report examining trends in the pediatric health care market in Massachusetts. The report demonstrates that as the overall volume of inpatient pediatric care has decreased over the past decade—with total pediatric discharges for Massachusetts residents falling by 37% from 2010 to 2019—pediatric care has become increasingly concentrated within two large academic medical center (AMC)-anchored provider organizations: Mass General Brigham (MGB), which includes Massachusetts General for Children, and Children’s Medical Center Corporation (Children’s), which includes Boston Children's Hospital. These two provider organizations accounted for just under half of all pediatric inpatient discharges and 58.1% of commercially insured pediatric patients in 2019.

The report also examines increasing concentration of pediatric outpatient services and pediatric primary care. The share of commercial pediatric hospital and ambulatory surgery center (ASC) outpatient visits at the three provider organizations with the highest volume (Boston Children’s, MGH, and Beth Israel Lahey Health) increased from 58.5% to 64.3% from 2015 to 2018, and the share of commercial pediatric primary care services delivered by the four largest physician networks (Children’s, MGB, Optum, and Tufts Medicine) increased from 67.4% to 69.6% over the same period. Recent market changes, such as Children’s expansions of inpatient beds on its Longwood campus, its expansion of outpatient services outside of Boston, its acquisition of Franciscan Hospital for Children, and the closure of 41 pediatric beds at Tufts Medical Center and its subsequent clinical affiliation with Children’s, are likely to further concentrate the pediatric market in the Commonwealth.

While regionalization of pediatric care into a few large provider organizations with substantial volume may have benefits, such as ensuring clinicians see a sufficient volume of pediatric patients to maintain clinical skills and that care is delivered at sites tailored to pediatric patients, consolidation may also negatively impact both access to care as families must travel to metro Boston for more pediatric services, and health care spending as patients shift to larger, higher-priced providers.

“The increased consolidation we have seen in the pediatric health care market poses real risks for consumers in terms of affordability barriers and potential exacerbation of regional and demographic disparities in access to care,” said David Seltz, HPC Executive Director. “Policymakers and providers must work together to find a balanced path forward that can realize the benefits of a more regionalized model of care while ensuring that every child in the Commonwealth has access to essential pediatric services without unduly burdening families in terms of cost, time, or distance from their communities.”

Key findings from the report include:

• Decrease in Pediatric Hospital Volume: Over the past decade, the total volume of inpatient pediatric care in Massachusetts has declined, especially for commercially insured patients. This trend is consistent with changes observed in other parts of the United States. As a result, many providers have reduced or eliminated pediatric capacity.
• Concentration of Pediatric Care: Pediatric hospital services in the Commonwealth are now primarily concentrated within two large AMC-anchored provider organizations – Mass General Brigham and the Children’s Medical Center Corporation. Pediatric physician services are also provided mainly by a few large physician networks, including those affiliated with these organizations. This concentration is likely to continue and has the potential to intensify disparities in access to care.
• Impact on Prices and Spending: The hospitals with the largest volume of pediatric care in Massachusetts have the highest inpatient commercial prices, even after adjusting for patient acuity differences. This pattern extends to commercial outpatient hospital prices. Greater market consolidation at these provider organizations is likely to result in higher overall spending for pediatric care.
• Benefits and Challenges of Regionalization: Regionalization of pediatric care into a few large provider organizations can create economies of scale, allow providers to see a sufficient volume of pediatric patients to maintain their clinical skills, and improve access to specialized care. However, this model may negatively impact access to care as more pediatric patients are forced to travel long distances to seek treatment, leading to longer lengths of stay and higher readmission rates, as well as additional hardships and financial burdens for families and caregivers.
• Strain on Providers and Quality of Care: Concentration of lower-acuity pediatric care at large provider organizations may strain their ability to provide the highest quality care to all pediatric patients, particularly those requiring critical care. Overcrowded pediatric emergency departments with patients seeking non-critical care may lead to poorer health outcomes. Concentration at large provider organizations can also make it more difficult to scale-up services at community sites when there are surges in pediatric acute medical need.
• Path Forward: There is a need for collaboration among policymakers, provider organizations, and other stakeholders to strike a balance between the benefits and challenges of regionalization and to ensure continued access to key pediatric services in communities, control health care spending, reduce affordability barriers for patients, and secure the equitable distribution of resources across geographic areas and demographic groups.

The Health Policy Commission offers several recommendations to promote affordable access to high-quality pediatric care in an increasingly concentrated market.

• Consensus on Community-Based Care: The Commonwealth and stakeholders must define and build consensus around a set of lower-acuity pediatric services that can be safely provided in community settings to optimize pediatric care distribution, reduce the burden on specialized pediatric providers, and enhance access to routine pediatric care.
• Data Collection and Health Equity: A commitment should be made to enhance data collection efforts across payers, providers, and government agencies, including expanding data resources and the collection of patient demographic information. These improved resources are crucial to assessing and addressing disparities in pediatric health outcomes.
• Leveraging Telehealth: The adoption and expansion of telehealth technologies, including remote consultation, patient monitoring, and telemedicine as well as the associated expansion of broadband/digital infrastructure, will play a pivotal role in supporting pediatric services outside of urban centers, and should be utilized.
• Constraining Provider Prices: Prices are the primary driver of health care spending growth in Massachusetts. To control spending and reduce affordability barriers, the Legislature should take action to constrain price growth for the highest priced pediatric providers.
• Enhanced Financial Incentives: To support the continued provision of pediatric care in community settings, payers should consider financial incentives such as implementing primary care and pediatric care sub-capitation or targeted rate enhancements, and the state should promote investments in pediatric workforce development, telehealth, and similar initiatives that support community-based access to care.

"The future of pediatric health care in Massachusetts lies in collaborative efforts that prioritize equitable access, affordability, and quality,” said Seltz. “These strategic recommendations represent a roadmap ensuring that every child, regardless of their location or background, receives the necessary health care they deserve."

The full report, including the policy recommendations, is available on the HPC’s website.

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