MASS GENERAL BRIGHAM, the state’s largest and most expensive health care system, says it is on track to meet the cost savings target it agreed to as part of a first-of-its-kind agreement with the state’s Health Policy Commission.
The hospital system in September 2022 agreed to pare back its costs by $176.3 million over the 18 months between October 1, 2022 and March 31, 2024, or $127.8 million on an annualized basis.
At a meeting of the Health Policy Commission on Wednesday, agency officials said savings through the first six months of the hospital system’s performance improvement plan totaled $45.3 million – 25 percent of the targeted amount a third of the way through the 18-month initiative. Mass General Brigham said it believes it is on track to meet its 18-month goal.
The hospital system is ahead of the cost-cutting targets in most elements of the performance improvement plan except in two areas – reducing the use of magnetic resonance imaging and CT scans and expanding health care delivery in patient homes.
The cost-cutting agreement was the first and only time so far that the Health Policy Commission has required a health care provider to pare back its costs to help bring the overall health care system into alignment with the largely voluntary annual cost growth benchmark.
Mass General Brigham originally insisted it was being unfairly targeted by the commission, claiming it was being asked to develop a so-called performance improvement plan “based on outdated financial details” that also failed to account for the fact that the hospital system treats some of the state’s sickest patients. Eventually, however, the hospital system relented and proposed a performance improvement plan with $70 million in annualized savings that was later raised to $127.8 million after negotiations with commission officials.
David Seltz, the executive director of the Health Policy Commission, said the agency will validate all the numbers supplied by Mass General Brigham. But he went out of his way to praise Mass General Brigham for its efforts.
“The tone and tenor of the conversations with Mass General Brigham have been extremely positive,” Seltz said.
The performance improvement plan envisions the biggest savings — $86.4 million — coming from a lowering of outpatient rates at Mass General Brigham’s academic medical centers, including Massachusetts General Hospital and Brigham and Women’s Hospital. Through the first six months of the performance improvement plan, savings were $16 million, slightly higher than the forecasted $15.6 million.