The Massachusetts Department of Public Health’s decision Friday to not recommend several components of Mass General Brigham’s massive, $2.3 billion expansion may mark a turning point in how the state regulates hospital growth.
MGB revealed on Friday that DPH staff refused to support MGB’s outpatient expansion plans in Westwood, Woburn, and Westborough. DPH staff also suggested the hospital chain trim a proposed expansion at Massachusetts General Hospital, saying in a report that the health system hadn’t demonstrated enough need for all the beds and equipment it wants to add.
After learning of DPH’s decision, MGB withdrew its outpatient plans, the hospital said. DPH did not return requests for comment. The final approval rests with the Public Health Council, which will likely base its vote on the DPH staff’s recommendations.
According to experts, the rejection appears to be the first time in decades that DPH has stood in the way of hospital expansion, and could be meaningful as the agency fields another big project: the $434 million expansion of outpatient services by Boston Children’s Hospital.
“We woke up to a new reality,” said Paul Hattis, senior fellow at the Lown Institute, a Needham-based health care think tank, and a former member of the Public Health Council. He said the decision was a lesson not just for MGB and Children’s, but also for Beth Israel Lahey Health, which has been growing in Massachusetts and New Hampshire as it seeks to compete with MGB. “They all have to see that the state is going to pay hopefully increasing attention to affordability and market function.”
Yet questions remain about how much Friday’s decision stemmed from an attitude change at the agency, and how much was the result of broader political pressure. The attorney general; the Health Policy Commission, the state’s health care watchdog agency; and legislative leaders all voiced concern about the expansion.
“In a normal procedure in an expansion that wasn’t as large as MGB, you would probably not have gotten the attention that this expansion got,” House Speaker Ron Mariano said.
Unlike hospital mergers and acquisitions, which are subject to oversight by the health policy commission and attorney general, hospital expansions currently are not.
Mariano said more reform is needed to make sure the commission and attorney general regularly weigh in on hospital expansions that could raise costs, and he pointed to a bill the House passed that would include more regulatory oversight when larger health systems set up facilities outside of their campus.
At the least, Friday’s decision was a departure from how the agency has previously reviewed expansion requests. DPH rarely rejected any outright, usually suggesting modest conditions in response to concerns from competitors and watchdogs.
Hattis said that, to his knowledge, the last time DPH rejected a hospital expansion was in 1983.
But Hattis said it appeared to him that DPH staff realized it had the power to deny projects in its review of MGB. In the two DPH staff reports issued on the Massachusetts General Hospital and Brigham and Women’s Faulkner expansions, DPH placed the burden of proof on the applicant to show how the projects would advance state goals, instead of the agency trying to prove why a project shouldn’t happen.
“I don’t think DPH really ever saw themselves as having that power under the regulations until they woke up this time around,” Hattis said.
The decision also represents a broader scope of review for DPH, said Nancy Kane, an adjunct professor at the Harvard School of Public Health and a board member of the UMass Health System, an MGB competitor that opposed MGB’s outpatient expansion.
Previously, DPH’s reviews focused on more narrow questions, such as whether applicants could demonstrate a desire and some measure of need to expand, Kane said. In Friday’s staff reports, the agency looked more expansively at the market and how MGB’s project might impact other hospitals and health care costs.
“I think DPH’s mission has been much less concerned with the broader issues of affordability and competition,” Kane said. “I hope the state as a whole takes a more active role in trying to model a market that is affordable and maintains some level of competition.”
While it was unclear if the agency would take the same approach with future projects, John McDonough, a professor with the Harvard T.H. Chan School of Public Health, said state and legislative leaders have at least signaled that they are paying attention to health care costs.
In the case of MGB, McDonough said the cost concerns were so apparent that DPH could not ignore them. Attorney General Maura Healey made the unusual decision to undertake an independent civil investigation, reporting llast year that MGB’s planned expansion would ultimately increase health care spending statewide if it drew patients from lower-priced providers. Those comments were echoed by the state’s Health Policy Commission, which said the projects would raise annual health care spending by between $46 million and $90.1 million. The agency also put MGB on notice for its past spending.
To approve the expansion in light of those concerns would have undone the state’s cost containment laws, McDonough said.
“Everybody is watching, everybody is paying attention. And paying attention in a different way than they would have been two weeks ago,” said McDonough. “Things are different.”
Mariano said that kind of attention and focus of large state groups should be a required part of the approval process, not just happenstance because a project is large. Though DPH is currently required to look at cost concerns, there is nothing in its charter that spells out what that should entail.
“Cost containment can be a superficial, back of the envelope attempt to put some numbers together, or it can be an in-depth market study,” Mariano said. “I’d prefer it be an in-depth market study, which is why in our bill we spell out the involvement of the folks who can do a full blown study if it needs it.”
While state officials spoke with one voice to condemn parts of MGB’s expansion, some people are mourning the state’s decision.
Andrea Levy in Westborough has gone to MGB facilities three times in the last week for tests and procedures related to her long-COVID-19 diagnosis. The visits were among the two to three a month to MGB locations she’s had to make since being diagnosed in April 2020.
Levy had grown excited about the possibility of seeing her doctor without driving into the city.
“I was so disappointed when we saw that article. We were looking forward to it,” she said.