A state panel’s upcoming vote on a $1 billion building project proposed by Boston Children’s Hospital comes down to this: Will allowing one of the nation’s most prestigious pediatric care centers to become bigger also drive up medical spending statewide and cause irreparable harm to Children’s competitors? The short answer: It doesn’t have to. Concerns about the project’s ripple effects are legitimate, but they don’t outweigh the need to upgrade a hospital that provides life-saving care to thousands of children from Massachusetts and around the world.
The Public Health Council on Thursday is expected to render a verdict on the Children’s project. Panel members will have to sort out two very different reports from state agencies.
The Health Policy Commission was skeptical, warning that expanding the high-cost hospital would likely increase annual health care spending in Massachusetts and bulk up Children’s already considerable market clout to the point that other hospitals with strong pediatric services eventually might be forced to shut their doors.
The Department of Public Health, however, recommended that Children’s can proceed with the work, which calls for a new 11-story building that will allow the hospital room for 71 more beds — giving it about 475 in the Longwood Medical Area. It also will build a smaller outpatient center in Brookline. The DPH wisely qualified its endorsement with some key conditions. Among them: The hospital can’t pass on to commercial insurers and patients any project-related expenses in excess of the state’s 3.6 percent annual target for spending hikes. In addition, Children’s will have to demonstrate that it’s filling the new beds primarily with patients from outside Massachusetts — as it’s promised to do — not with Boston-area children who could be treated at another, lower-cost, local hospital. If Children’s doesn’t comply with these and other stipulations, the state could prevent it from adding beds, and levy fines exceeding $25 million — an unprecedented regulatory measure. Last week, Stuart Altman, who chairs the Health Policy Commission, indicated he’s now satisfied the requirements are tough enough to curb spending.
Nonetheless, the plan continues to face a wave of criticism. Competitors, of course, are against it. Opposition is coming also from the Massachusetts Association of Health Plans, the Greater Boston Interfaith Organization, and a group that has gone to court in an attempt to preserve the hospital’s Prouty Garden.
By focusing on health care spending, critics are downplaying the underlying reason for the massive undertaking. Children’s handles highly complex pediatric cases such as organ transplants and brain-tumor surgeries. It’s also conducting eight gene therapy trials. But the facilities in which this amazing healing and research takes place are inadequate, tired, and crowded. Sandra Fenwick, Children’s president, says an 80 percent occupancy rate is ideal; Children’s is at 85 to 90 percent. The new building will offer patients and their families the privacy of single-occupancy rooms, the latest technology would be easier to install and use, and surgeries now delayed because of the space crunch would be expedited. The larger patient population will help provide economies of scale.
It’s true that the services Children’s provides are expensive: about 69 percent more than Tufts Medical Center’s Floating Hospital for Children, and 51 percent higher than Massachusetts General Hospital. But the Commission’s warning that the project could add to health care spending statewide isn’t as ominous as opponents claim. It estimated the potential yearly increase at $8.5 million to $18.1 million for patients with commercial insurance. That’s a minute fraction of the $57 billion spent on all Massachusetts medical care in 2015. Besides, the conditions recommended by the Department of Public Health should serve to keep the extra spending in check. They also put Children’s on notice: Approval of the project doesn’t grant it blanket permission to charge more for care.
The Public Health Council should sign off on the project. Tighter controls on health care spending are needed, but they can’t come at the expense of progress.