Jan 25, 2022 - Health

Health cost regulator reprimands dominant Mass. hospital system

Ambulances parked outside Massachusetts General Hospital building.

Massachusetts General Hospital, the system's flagship hospital. Photo: Blake Nissen for The Boston Globe via Getty Images

Mass General Brigham must submit a plan to lower rising costs that stem from the hospital system's expensive care, the Massachusetts Health Policy Commission said today.

Why it matters: This commission is viewed as a potential template for other states to regulate rising hospital and physician spending. This is the first time the agency has taken action on a hospital system to temper costs.

What they're saying: Mass General Brigham — the dominant, tax-exempt academic hospital organization in Massachusetts with $16 billion of annual revenue — has the highest prices in the state.

  • The system's market power has led to residents paying a lot more in health insurance premiums and taxes, and that higher spending "raises significant concerns" and is "likely to continue to impact the state's ability to meet" a benchmark of lower cost growth, the commission said during Tuesday's meeting.
  • The commission analyzed the medical spending trends within Mass General Brigham's largest physician organization, and determined those costs "are consistently among the highest in the state for the big three commercial payers."
  • Mass General Brigham's high spending led to $293 million from 2014-2019 that otherwise would not been spent if the system's spending had been in line with the state's growth benchmarks, said Kara Vidal, a director at the Massachusetts HPC.
  • The system has 45 days to submit a "performance improvement plan" that explains how it will "address the underlying causes" of its high costs. A $500,000 fine could be levied "as a last resort in certain circumstances."

The other side: Mass General Brigham would not make anyone available for an interview, but said in a statement it treats "the sickest and most complex patients," and the commission's "refusal to acknowledge the acuity of our patients in its judgment of health care spending is short-sighted and unfair, especially to patients."

  • The HPC said it met with Mass General Brigham leaders, but their responses "did not allay the concerns" about the system's high prices and spending.

The bottom line: States increasingly want to rein in spending on hospitals and doctors, and Massachusetts is trialing an approach that other state health policy experts are watching closely.

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