Healey says Mass General Brigham expansion will net $385m annual profit
AG raises new questions about impacts on health care costs
MASS GENERAL BRIGHAM’S proposed expansion into the suburbs would net the health system an estimated $385 million a year in profits, according to a report released Wednesday by Attorney General Maura Healey, raising questions about the expansion’s impacts on overall health care costs in the state.
Healey spokesperson Jillian Fennimore said the attorney general’s office has a legal mandate to monitor trends and cost drivers in the health care market. “This report is intended to provide important information about the potential impact of MGB’s expansion projects on health care costs,” Fennimore said in a statement. “We want to encourage a robust and transparent analysis of this proposal and its impacts on health care affordability, access, and equity.”
Mass General Brigham – formerly known as Partners HealthCare — has proposed building three new ambulatory care centers in Westborough, Woburn, and Westwood. The sites would offer surgery, physicians’ offices, and imaging services. Mass General Brigham, state’s largest provider network, says the goal is to bring more convenient care to patients, who now have to drive to Boston for the same services at the system’s flagship hospitals, Massachusetts General Hospital and Brigham and Women’s Hospital. The health system says this could reduce the cost of care, since patients would be getting the services in less expensive satellite locations instead of at its main hospitals.
But critics – including other area hospitals and health care providers – say Mass General Brigham’s goal is to siphon off higher-income, commercially insured patients. This would leave existing hospitals like UMass Memorial in Worcester with lower-paying Medicare and Medicaid patients. It could also add costs to the overall health care system, since Mass General Brigham negotiates some of the state’s highest rates with insurers, so the more patients use their services instead of a smaller provider’s, the higher the total cost.
Although Healey’s report does not take a position on whether the expansion should go through, it raises new questions about the proposal at a time when Mass General Brigham is already facing heat from other state officials. The House, led by Speaker Ron Mariano, on Wednesday passed legislation that would give the state Health Policy Commission new authority to review expansion plans and grant independent hospitals virtual veto power over expansion plans by large networks like Mass General Brigham that would crowd into their service area. Meanwhile, also on Wednesday, members of the Health Policy Commission grilled a panel of health care executives from large systems, including the CEO of Mass General Brigham, about their high rates for services and contribution to the state’s ever-increasing health care costs.
The state Health Policy Commission is still reviewing the Mass General Brigham proposal, which will need to be approved by the Department of Public Health. But the attorney general’s report provides the first independent analysis of how the expansion might affect the health care market.
Healey obtained internal documents from Mass General Brigham through a civil investigative demand, which she made based on her legal authority to investigate health care cost drivers. Healey wrote that she made some figures from the documents public “after balancing the public interest in this disclosure with the privacy, trade secret, and anti-competitive interests, and determining that the disclosure will promote the health care cost containment goals of the Commonwealth.”
The report provides the estimate, taken from Mass General Brigham’s 2018 planning documents, that the health care system would net $385 million in profits annually. The report says the profit it gets from sending patients from the ambulatory sites to the central hospitals would outweigh any savings from sending existing hospital patients to less expensive sites.
Mass General Brigham estimates that it would gain new patients, with 1 to 2 percent of all insured individuals in eastern Massachusetts becoming new MGB patients as a result of the expansion.
While public conversation has largely focused on the costs related to patient care, Healey wrote that it is also important to consider staffing, and the number of physicians that will move from other health care providers to Mass General Brigham under the proposed expansion. Mass General Brigham plans to add 22 new primary care physicians between the three sites and 68 specialists. If these doctors move from lower priced practices to Mass General Brigham – and bring some of their patients with them – that could also increase overall costs.
Healey recommended that the Health Policy Commission and Department of Public Health “consider this information as part of robust and transparent analyses of MGB’s proposed expansion, including the extent to which these projects contribute to or threaten the state’s goals for cost containment, and their impact on the state’s goals of health care access for all and health equity.”
“At a time when more health care is needed we should focus on providing the care, services, and capacity Massachusetts sorely needs. It is what our patients and the public want and deserve,” Sullivan said in a statement.Sullivan said the hospital will soon file an independent cost analysis as part of DPH’s licensing process. “We look forward to continuing to work with policy makers after reviewing that filing,” he said.
Healey’s report on cost impacts will be an important part of the Department of Public Health’s analysis of the expansion proposal. According to state regulations, in determining whether to approve an expansion, the department must look at whether the project “will meaningfully contribute to the Commonwealth’s goals for cost containment, improved public health outcomes, and delivery system transformation.” DPH could deny approval if it determines that the expansion would run counter to the state’s goals of containing health care costs.