Children’s Hospital expansion won’t cut costs
Actually, it shifts costs to private-pay patients
IN 2008, A SEMINAL ARTICLE was published in Health Affairs by Donald M. Berwick, Thomas W. Noland, and John Whittington, entitled “The Triple Aim: Care, Health, And Cost.” Its conclusions are foundational to much of the Affordable Care Act of 2010 and also to much of the work undertaken in recent years by many of the states, notably Massachusetts.
So widespread is this thinking, and so rich is the experience in the years following enactment of the Affordable Care Act, that it is fair to say that the American health care delivery system has been significantly redirected in pursuit of the Triple Aim. Many who study health care in the US would agree with the authors that, “the numerous recent state-level initiatives for universal health insurance coverage inevitably face the Triple Aim as the only route to affordability.”
It is in this context that the board of the Boston Children’s Hospital has undertaken a massive $1.5 billion project to address the purported deficiencies in the capacity of its buildings and to design “brick-and-mortar” improvements. The hospital estimates the expansion will add $138 million to its operating costs
The hospital faces the reality that its costs are among the highest in the state, and its competitive position will inevitably decline in an environment in which insurers and provider systems are integrating in pursuit of the Triple Aim. The board of the hospital reasoned that a new building, containing more beds and all-private rooms in addition to a larger Neonatal Intensive Care Unit and specialized Heart Center, would improve its competitive position and increase its total revenues. Like many hospitals in our traditional delivery system, Boston Children’s Hospital reasoned that filling more beds and increasing overall revenues would be a beneficial result, and they designed the project accordingly.
The Prouty Garden was an endowed gift made by Mrs. Olive Higgins Prouty, who funded the landscaping and maintenance of the garden in trust, in perpetuity. In the words of many letter writers, the Prouty Garden is the “heart and soul” of the hospital.
The expansion project is now under consideration by the Department of Public Health, which must determine whether the plan should be granted a certificate of need. Another layer of review, by the Health Policy Commission, is also under way.
The Boston Children’s Hospital project as currently proposed fails to meet the test of the Triple Aim and, if it goes forward, will propel backward the delivery system in Massachusetts and miss an important opportunity to move decisively in the direction of high-quality, cost-effective care.
As for the first two goals of the Triple Aim, improving care and health, state regulators would do well to read the evidence contained in the many letters from patients, parents, clinicians, and others who have written heartfelt and compelling letters describing the therapeutic benefit the Prouty Garden has provided to the sick children served by the hospital.
Finally, consider the goal of reducing the cost of care. By building 71 additional beds and converting all beds to private rooms, the strategy appears to be aimed at attracting international patients who pay higher costs than our government and commercial insurers.The old idea of cost shifting to private-pay patients is an outdated idea not in keeping with the strategy of lowering per capita costs. It does not uphold or serve the interest of the community whose charitable and tax dollars have supported this not-for-profit hospital for more than 130 years. Further, it does not meet the stated goals of the Department of Public Health to reduce disparities and to “serve the population on a statewide basis, as well as the needs of particular geographic areas of the state.” By “pricing out” the Medicaid population and patients with lower-cost commercial coverage, who would be unable to receive their care, Boston Children’s Hospital will have contributed directly to the odious disparities of care that Massachusetts seeks to remedy. And the strategy of the project design will spiral the hospital on the discredited course of increasing the overall cost while ignoring the elements of quality and lowering of per capita cost that will determine its competitive advantage in the foreseeable future.
The Boston Children’s Hospital expansion plan is the hospital’s answer to an outdated and irrelevant question. Times have changed for hospitals, and the Triple Aim goals are now the state of the art in health care.