Massachusetts health officials Thursday gave final approval to Boston Children’s Hospital for a $1 billion expansion, rejecting arguments by opponents that project would undercut the state’s efforts to contain medical spending.
The 10-0 vote by the Massachusetts Public Health Council gives the hospital a green light but imposes conditions that would penalize Children’s if it fails to keep health cost increases within limits. The council’s decision followed the recommendation of the state Department of Health and support from Governor Charlie Baker.
Children’s plans a new 11-story building on its Longwood campus, eventually adding 71 new beds to the 404 beds already there. The hospital also will renovate part of the campus and construct a new outpatient center in Brookline. A state report indicated the project might not be fully completed until 2025, though hospital officials did not provide a timeline Thursday.
The council on Thursday turned aside a request from a group of activists for a last-minute reprieve of the small outdoor garden that would be demolished to make room for the Longwood facility. The Friends of Prouty Garden has for months been trying to block the project to save the outdoor refuge for sick children and their families.
But the debate over the expansion morphed well beyond the fate of a cherished green space. The project has became the latest flash point in the state’s long struggle to control rising health care costs.
Some health insurers, competing hospitals, and employer groups warned that the addition will drive up medical spending because Children’s, one of the top-rated pediatric care-givers in the country, is also the most expensive in Massachusetts. A state watchdog agency, the Health Policy Commission, issued a similar warning.
“The spark . . . was indeed the proposal to plunk down this billion-dollar project right on Prouty Garden,” Gregor I. McGregor, the attorney for the Friends group, said after Thursday’s decision. “However, that spark has grown to a conflagration of fire that now involves increased medical costs in the Commonwealth of Massachusetts.”
McGregor said the group will probably appeal the decision, either with the state or in the courts. The group already has an open lawsuit against Children’s plan in Suffolk Superior Court. The state considers the decision by the public health council, an appointed board made up mostly by industry professionals that oversees state health rules and medical projects, its final word.
Opponents have also questioned the underlying need for the project, citing trends that show declining demand for pediatric services.
Children’s has said the expansion would largely meet demand from patients outside Massachusetts and from other countries, which would minimize the effect on state health care spending. The hospital says it needs the Longwood expansion so patients have more privacy, doctors have more room to perform surgeries, and to cut down on wait times.
The project also includes an eight-story ambulatory services building in Brookline.
In a nod to critics, state officials placed several conditions on the hospital in an effort to control costs.
It cannot, for example, pass the costs of the project on to patients and insurers “in excess of the Commonwealth’s cost containment goals.” The state has a target of keeping health spending increases to 3.6 percent a year. It must also provide data annually on its out-of-state patient business, and maintain its level of service to patients on Medicaid.
Children’s faces fines if it fails to meet the state’s conditions, and as the new beds are phased in, licenses could be withheld or taken away if the conditions are not met.
In a statement, the Department of Public Health said the approval incorporates “unprecedented conditions and safeguards, including financial penalties and ongoing reporting, to prevent negative impacts on Massachusetts health care costs.”
But Nancy Kane, a professor at Harvard’s T.H. Chan School of Public Health, said measures meant to control costs can be difficult for regulators to put into practice.
“It’s really hard to maintain the technical expertise, the legal expertise, and the political expertise to enforce these kinds of cost-containing techniques,” she said.
It is unclear when Children’s will break ground; a hospital spokesman did not respond to questions about the project timeline, and Sandra Fenwick, Children’s chief executive, spoke generally about the next steps during brief comments to reporters Thursday.
“We will continue the planning process and then the construction,” Fenwick said. “We have approval at the moment. We will continue with the process.”
A report last month from the Department of Public Health that recommended approval projected that 2025 would mark the first full year of operations for the completed expansion.
Prior to Thursday’s meeting, members of the Friends of Prouty Garden rallied in front of the State House. On-hand were former patients and parents, advocates for green space, and Stephen Gellis, a Children’s doctor who believes the space should be preserved and that the hospital is acting with “arrogance” by moving forward. Rally-goers referred to the garden as “sacred space” and a “healing garden.”
Fenwick said that building over Prouty Garden was the most feasible option for growth, because other options would be more expensive or take more time to build. Children’s plans to replace it with new green spaces on the campus, she said, and is working with the garden’s namesake Prouty family to plan the new spaces.