Report raises few concerns on MGB expansion
Says 3 new centers would reduce health care expenditures
MASS GENERAL BRIGHAM’S controversial proposal to spend nearly $224 million on three ambulatory care centers in Westborough, Westwood, and Woburn would slightly reduce health care expenditures in the communities and conform with the state’s cost-containment goals, according to an analysis of the project released on Tuesday by the Massachusetts Department of Public Health.
The independent cost analysis was prepared by Charles River Associates and paid for by Mass General Brigham. It was prepared as part of the Department of Public Health’s determination of need review of Mass General Brigham’s proposal, with the goal of calculating the impact of the project on prices, utilization, and competition in the three communities.
The ambulatory care centers would each feature four operating rooms, special units for computed tomography (CT) and magnetic resonance imaging, and primary care and specialist physician services.
The analysis relies heavily on assumptions gleaned from academic literature in determining that the Mass General Brigham project would have minimal impact in the three communities and reduce prices overall.
Mass General Brigham issued a statement saying the cost analysis confirmed what the hospital system has been saying since it filed its expansion plans in January 2021 — that the care centers in the three communities would allow existing patients in those areas to obtain their care locally and save money doing so.
“Now, more than ever, Mass General Brigham patients want and need more access to health care, closer to their homes, at lower cost,” the statement said.
Mass General Brigham’s proposal is facing unusually strong pushback in the medical community and on Beacon Hill. Eric Dickson, the CEO of UMass Memorial Healthcare and the chairman of the board of the Massachusetts Health and Hospital Association, says hospitals like his that cater to the poor rely more heavily on Medicaid funding and can only survive if they are cross-subsidized by higher payments from commercial insurers. He said his hospital is barely breaking even now, and would be hard hit if Mass General Brigham moves into the area and lures away commercial customers.
“If you let the most expensive, largest health care system in the state expand to one of the wealthiest regions of the state and neighborhoods of the state, we just all have to go in eyes wide open and say, boy, that’s going to have a negative effect on the health care systems that were cross-subsidizing their care before, and in Westborough that’s us,” Dickson said on The Codcast in May.
In November, the House passed legislation giving the Health Policy Commission more oversight over hospital expansions and providing community hospitals with what amounts to veto power over efforts by large hospital system to encroach on their service area.
Days later, Attorney General Maura Healey released a short report based on internal Mass General Brigham planning documents indicating the hospital system itself estimated it would net $385 million in profits annually from the $224 million expansion. The report says the profit Mass General Brigham would receive from sending patients from the ambulatory sites to its academic medical centers in Boston would outweigh any savings from treating existing hospital patients at less expensive sites in the three communities.
The Charles River Associates analysis focused more locally in the three communities, estimating the ambulatory care centers in Westborough, Westwood, and Woburn would result in slightly lower expenditures on diagnostic imaging services and outpatient surgical services.
The analysis indicated the impact of a Mass General Brigham facility would be negligible if it just attracted patients currently receiving services at other Mass General Brigham facilities. If the facility did cut into the business of competitors, the impact in most cases was fairly small, according to the Charles River report.In Westborough, the report estimated a Mass General Brigham facility could decrease UMass Memorial’s market share for outpatient surgeries by 1.9 percentage points and 4.3 percentage points for CT scans. For magnetic resonance scans, the report predicted a 5.2 percentage point drop in market share for Shields Health Care.
Another analysis of the Mass General Brigham expansion — by the Health Policy Commission — is due soon.