Massachusetts regulators on Tuesday rebuked Mass General Brigham for pushing health care spending above acceptable levels, and sharply criticized the health system’s plans to expand its existing hospitals and build new suburban outpatient centers.
The admonition of MGB over spending was the strongest such action for the Health Policy Commission in the six years it has reviewed health care market transactions.
“Forty-six percent of Massachusetts residents say they went without needed care because of the cost of care,” said David Seltz, executive director of the commission, citing a recent survey. “The context here is around how do we develop an affordable health care system for everyone in the future? And Mass General Brigham has a big role to play in advancing that shared goal.”
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The state tries to keep the growth of total medical spending under 3.1 percent annually. In 2019 medical spending in Massachusetts totaled $61.4 billion.
However, on primary care patients affiliated with Mass General Brigham, total spending on their health care was $293 million above the limits from 2014 to 2019. The output was more than double that of the second-highest health system in Massachusetts, despite years of warnings to Mass General Brigham about its growth in spending.
As a result, Mass General Brigham will be required to file a “performance improvement plan” with the commission within 45 days, outlining a target to keep health care spending in check, the current causes of growth, and how it proposes to intervene and measure progress.
Failure to comply comes with a $500,000 fine.
Mass General Brigham said in a statement that it was disappointed that it would be required to account for its spending, based on “outdated financial details,” and said it was committed to staying within the state’s spending goals.
“The HPC was selective in its use of (data) that ignore the role of our academic health centers in treating the sickest and most complex patients in the Commonwealth,” the spokeswoman said. “The HPC’s refusal to acknowledge the acuity of our patients in its judgment of health care spending is short-sighted and unfair, especially to patients. The role Mass General Brigham has played during the pandemic should make that clear.”
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Despite the pandemic, commissioners said Mass General Brigham needed to be held accountable for years of spending that were “substantially higher” than average. Those higher rates have hurt the state’s ability to meet affordability benchmarks, the commission said.
“It’s likely that MGB’s performance has already impacted the benchmark and would continue to do so unless addressed,” Seltz said.
Beyond existing spending, the commission also criticized Mass General Brigham’s planned expansion efforts, saying they would only serve to further raise spending.
In all, the commission said that a $2.3 billion plan to open ambulatory sites in Westborough, Westwood, and Woburn, and expand Massachusetts General Hospital and Brigham and Women’s Faulkner Hospital would raise annual health care spending by between $46 million to $90.1 million.
Moreover, the commission said that a bigger Mass General Brigham would drain business from other health care providers at an estimated $150 million to $261 million a year. That could destabilize community hospitals that have fewer financial resources and serve more low-income patients.
The state’s Department of Public Health will review the report as it considers whether to allow Mass General Brigham to continue with the projects.
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The spokeswoman for Mass General Brigham also disputed the commission’s conclusions on the expansion plan, and said that even if spending increased at the limits the commission suggested, it would represent 0.15 percent of the state’s annual health care spending.
“Today’s comments by the Health Policy Commission ignore this state’s crippling healthcare capacity crisis, which preceded the pandemic, as well as the fact that patients deserve the choice to access high-quality care, closer to their homes, at a lower cost,” the spokeswoman said in a separate statement.
The findings by the commission were in stark contract to a cost report that Mass General Brigham commissioned and was required as part of the state approval process. That report said the expansions would not raise costs and even could lead to some health care savings for the state. Commissioners said the analysis “left out a lot.”
Arguments against the expansion, in particular the plans to open the new outpatient sites, echoed what many competitors and local leaders have been saying for months. In a presentation, commission staff said the sites would draw patients and physicians from other lower-cost providers and would ultimately refer more patients from those areas to more expensive downtown Boston hospitals.
Without the expansion, patients would be seen at existing, lower cost sites, the commission said.
The commission’s action is but the latest strong stance against Mass General Brigham’s expansion attempts. In November, the commission deeply criticized Mass General Brigham during its annual Cost Trends Hearing, which takes a more pointed approach to hospitals and insurers that have the highest spending.
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That same day, Attorney General Maura Healey issued a report raising concerns the expansion into the suburbs would not not save the state money. She also detailed plans Mass General Brigham was discussing internally to further expand. Those plans would also contribute to higher state spending, she said.