Mass General Brigham pledges to cut costs $70m a year

Bulk of savings would come from cutting cost of outpatient visits

MASS GENERAL BRIGHAM says it intends to cut spending $70 million a year across its hospital network to comply with a Health Policy Commission directive to bring its costs in line with the state’s health cost benchmark.

In a first-of-its-kind filing, the state’s largest hospital system said its performance improvement plan would meet the savings target by reducing hospitalizations, emergency room visits, and imaging services (saving $10.8 million); shifting care to lower-cost settings, including community hospitals and at-home and virtual treatment (saving $5.3 million), and reducing prices for outpatient visits at its academic medical centers, ConnectorCare, and its insurance subsidiary’s services (saving $53.8 million).

Mass General Brigham said its savings could end up being higher if other initiatives bear fruit, including programs designed to reduce use of skilled nursing facilities and value-based care programs that set overall spending targets and incentivize the hospital system to live within them.

No hospital or hospital system has been directed by the Health Policy Commission to come up with a plan for reining in its spending previously, so the filing and its upcoming review represent uncharted waters.

The Health Policy Commission posted the filing on its website Tuesday, a day after it was filed. The commission and the hospital system will now begin negotiations over whether the targets are sufficient to address Mass General Brigham’s cost growth and whether the hospital system is capable of delivering on them.

Paul Hattis, a senior fellow at the Lown Institute, said the filing talks about spending cuts but doesn’t clearly spell out whether overall spending will actually decrease by that amount. He also said the $70 million in spending reductions represents only a tiny portion of the hospital system’s nearly $12 billion in patient revenue.

Hattis called the plan “wholly inadequate.” He added, “This is like pocket change in my mind.”

In January, when the Health Policy Commission ordered Mass General Brigham to come up with a performance improvement plan, the hospital system said it disagreed with the decision.

In its filing, Mass General Brigham sounded a different tone. “Mass General Brigham acknowledges its contribution to spending growth in the Commonwealth and looks forward to working with the Health Policy Commission, policymakers, and payers to come up with solutions to meaningfully address the health care spending challenge,” the hospital system said.

Still, the filing makes the case that Mass General Brigham is being held to a higher standard. The Health Policy Commission said in January that total commercial spending on primary care patients affiliated with the hospital system was $293 million above benchmark limits between 2014 and 2019.

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Bruce Mohl

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About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

About Bruce Mohl

Bruce Mohl is the editor of CommonWealth magazine. Bruce came to CommonWealth from the Boston Globe, where he spent nearly 30 years in a wide variety of positions covering business and politics. He covered the Massachusetts State House and served as the Globe’s State House bureau chief in the late 1980s. He also reported for the Globe’s Spotlight Team, winning a Loeb award in 1992 for coverage of conflicts of interest in the state’s pension system. He served as the Globe’s political editor in 1994 and went on to cover consumer issues for the newspaper. At CommonWealth, Bruce helped launch the magazine’s website and has written about a wide range of issues with a special focus on politics, tax policy, energy, and gambling. Bruce is a graduate of Ohio Wesleyan University and the Fletcher School of Law and Diplomacy at Tufts University. He lives in Dorchester.

The Mass General Brigham filing noted that health status-adjusted health care spending for commercial patients, a measurement designed to reflect the “higher acuity patients who seek care at Mass General Brigham,” came in below the state’s cost growth benchmark from 2016 through 2019.

Mass General Brigham said the Health Policy Commission more recently has been focusing on unadjusted health care spending, which the hospital system said is the focus of its performance improvement plan.

Mass General Brigham said its price increases from 2016 to 2019 were below the benchmark, but total health care spending rose because patients were using more hospital services. “We saw increased utilization driven by a higher risk population. There also continue to be factors that drive health care spending that are outside of an individual health systems control, such as pharmacy costs,” the filing said.