What Mass General Brigham cost analysis overlooks

Report is overly narrow, presents misleading picture

MASS GENERAL BRIGHAM recently proposed a $2 billion expansion that would create two new outpatient clinics in Westborough and Woburn and expand a clinic in Westwood. As organizations that represent businesses in the Worcester region and health care consumers across the state, we have serious concerns that this plan would increase health care costs for consumers and negatively impact health equity in Massachusetts.

A recently released Independent Cost Analysis commissioned as part of the Department of Public Health review process concluded the expansion would not drive up health care costs in the Commonwealth. The report largely focuses on current patients of the hospital system who will no longer have to travel into Boston to receive their care and will see reduced costs. This is certainly an important and positive development for these patients. However, this report is overly narrow and, therefore, presents a misleading picture and omits key considerations. Two additional and essential components must be taken into consideration when assessing the cost implications of this proposed expansion.

First, an analysis must look not only at the impact on outpatient care, which is considered in the report, but it must also look at whether the new ambulatory sites will shift referrals and inpatient hospitalizations toward higher-priced hospitals. If a higher-cost institution dominates the health care market across a range of health care services – outpatient care, inpatient care, imaging – costs will increase for everyone. This is what we believe will ultimately happen with the Mass General Brigham expansion, given that the hospitals in that system are some of the most expensive in the state. Health care costs are already a major concern for businesses and families across the Worcester region and statewide, and this expansion would only further strain employer and family budgets.

As highlighted in a report released by Attorney General Maura Healey, Mass General Brigham’s own estimates show that it anticipates increasing its market share of inpatient hospitalizations due to new referrals from the new outpatient sites. They also estimate the revenue from these new referrals will far outweigh the lost revenue from shifting some care for their patients to lower-cost settings – ultimately resulting in an increase in their direct margins of $385 million per year. It is the revenue associated with the change in market share of inpatient hospitalizations – not considered in the Independent Cost Analysis – that would likely increase overall health care system costs in Massachusetts.

Second, the Independent Cost Analysis report did not examine a key health care access and equity issue – how the proposed expansion will affect the financial stability of providers in the targeted areas who currently serve a disproportionate number of MassHealth and other publicly-insured patients. The proposed expansion sites are in predominantly white, higher-income communities with a disproportionate share of commercially-insured patients and surrounded by lower-income communities with a disproportionate share of publicly-insured patients.

The shifts in market share for outpatient services projected in the Independent Cost Analysis are almost certain to result in some commercially-insured patients shifting away from local community providers who care for more publicly-insured patients. These providers often operate on thin margins, so even a small shift could remove a key revenue stream that enables them to serve patients who are insured by MassHealth or Medicare or patients who are uninsured. While we hope these local providers will continue to serve these patients even if their commercial volume is down, the financial instability could ultimately force them to close or scale back critical medical, behavioral health, and other services. If that were to happen, it would jeopardize access to care and services for the most vulnerable patients, while the most privileged migrate to Mass General Brigham facilities.

The Health Policy Commission, the Attorney General’s Office, and other government entities have until the end of January to respond to the Independent Cost Analysis. We strongly urge these agencies to take note of its shortcomings and take a more comprehensive approach in analyzing the long-term cost, equity, and access implications of this proposal for the entire state. We also urge the Legislature to hold another public hearing to more thoroughly evaluate the impact of the proposal.

Meet the Author

Tim Murray

President and CEO, Worcester Regional Chamber of Commerce
Meet the Author

Amy Rosenthal

Executive director, Health Care for All
We hope the Department of Public Health Public Health Council will carefully consider the full picture when deciding whether to approve the ambulatory expansions. We believe the health care cost, access, and equity concerns raised here should give serious pause to considering the approval of the proposed outpatient expansions.

Tim Murray is the president and CEO of the Worcester Regional Chamber of Commerce and Amy Rosenthal is the executive director of the Massachusetts health care consumer advocacy organization Health Care For All.