Funds slashed at agency studying ways to contain health costs

It’s an obscure agency with a vital role: providing in-depth research to help the state monitor and contain health care costs.

But the Center for Health Information and Analysis, or CHIA, was blindsided when its budget was slashed by more than a third as part of a deal to avert a potentially nasty fight over hospital funding.

Under the compromise, reached in May, Local 1199 of the Service Employees International Union dropped its push for a ballot proposal that would have yanked $440 million in annual payments from Partners HealthCare, the state’s largest health system, and redistributed much of that money to lower-paid hospitals.

In return, Partners agreed to discuss possible unionization of some of its employees, and Beacon Hill leaders agreed to funnel more money to community hospitals — with about $45 million over five years coming from CHIA’s budget.

The deal, which raises questions about the scope of CHIA’s future work, has gotten a mixed reaction from health care policy makers and activists.

Brian Rosman, policy director of the consumer advocacy group Health Care for All, said he’s worried that cutting $10 million from CHIA’s annual budget will be a blow to the state’s ability to track and address rising health care costs.

“We worry that by taking money out of CHIA, [lawmakers and the governor] are hurting the very cause that they’re trying to solve,” Rosman said.

He and others also note the irony of a deal designed to address the wide disparities in the prices of health care services targeting an agency that studies that very issue — and that the agency’s budget cuts were approved by a governor who has called for more transparency in health care, not less.

But others question whether the agency truly needs such a sizable budget, given the state’s ongoing budget challenges.

“It’s a good time for all of us in state government to reflect on what we’ve built and how we’re going to continue,” said Representative Jeffrey Sanchez, a Democrat who cochairs the Joint Committee on Health Care Financing. “The budget dynamics of all state agencies are challenged, not just CHIA’s.”

Aron Boros was CHIA’s executive director until last month, when he stepped down to pursue new opportunities.

Boros made the decision to leave before learning about the budget cuts, and said he doesn’t understand why CHIA was targeted.

“I’ve never had a conversation with anybody in the Baker administration or the Patrick administration about stopping frivolous activities at CHIA,” Boros said. “The truth is that CHIA has been working on CHIA’s core mission.”

The agency’s annual budget grew over the past three years, from about $22 million to about $28 million. It did not spend through all of those funds, even though it hired dozens of new employees, bringing the headcount to about 150, and moved to a new office on Boylston Street.

It is set to lose $5 million from its budget in the fiscal year that began July 1, and $10 million each year in the four following years.

Andrew Jackmauh, a CHIA spokesman, said the agency is “exploring the implications of the recent changes” and has not decided exactly how to absorb the cuts.

A new director, Ray A. Campbell III, is scheduled to begin Aug. 1. Some job cuts are expected at the agency, where many workers are members of another unit of the SEIU, the National Association of Government Employees.

Governor Charlie Baker, a former health insurance executive, has often said that greater transparency around health care costs will help contain them. His administration said earlier this year that it was working with CHIA to create a new consumer website with useful information about the costs of medical services.

Now administration officials say they don’t know if they will launch a new consumer website, but they remain committed to making more information available to consumers. Officials said CHIA’s reduced budget would allow the agency to “return” to its core mission, without specifying how it may have strayed from that mission.

“We are working collaboratively with CHIA to … increase the amount of health care data available to consumers,” Baker spokesman Brendan Moss said in a statement.

Last year the governor sought more control over the agency, which resulted in a new oversight board for CHIA chaired by Baker’s health and human services secretary.

CHIA was created by a 2012 health care cost containment law, known as Chapter 224, which also spawned the Health Policy Commission, an agency that tracks health care mergers and other trends that affect costs.

Unlike the Health Policy Commission, which does more targeted studies, CHIA is designed to be the state’s clearinghouse for health care market data.

Senate President Stan Rosenberg, who along with Baker and House Speaker Robert A. DeLeo helped craft the compromise bill that mooted the SEIU’s proposed ballot question, said in a statement that if CHIA cannot fulfill its core mission with a reduced budget, “we can revisit this issue in the future.” DeLeo’s office did not comment on CHIA’s budget.

Partners and SEIU also did not comment specifically on the CHIA budget, but the union said it remains committed to the agency.

John E. McDonough, a professor at Harvard T.H. Chan School of Public Health who has followed the issue, said it’s too soon to know how the budget cuts will affect the state’s ability to track health care costs.

“It may be significant,” he said. “It may not be as significant as some people fear. The unfortunate thing is this was done without any public discussion about the consequences.”