States Watching as Massachusetts Takes Aim at Hospital Building Boom and Costs

[Greenbeard]

Per usual, interesting doings in Massachusetts. One state agency has blocked part of a proposed expansion by the state’s highest-priced hospital system, the one that owns Mass General, for fear it would drive up costs and a different agency has separately ordered that same system to come up with a plan to control its costs. This raises big questions of whether other states follow suit in scrutinizing their own hospital markets and whether this marks the beginning of a trend of relying on a heavier regulatory hand in tackling hospital prices around the country.

States Watching as Massachusetts Takes Aim at Hospital Building Boom and Costs

A Massachusetts health cost watchdog agency and a broad coalition including consumers, health systems, and insurers helped block the state’s largest — and most expensive — hospital system in April from expanding into the Boston suburbs.

Advocates for more affordable care hope the decision by regulators to hold Mass General Brigham accountable for its high costs will usher in a new era of aggressive action to rein in hospital expansions that drive up spending. Their next target is a proposed $435 million expansion by Boston Children’s Hospital.

Other states, including California and Oregon, are paying close attention, eyeing ways to emulate Massachusetts’ decade-old system of monitoring health care costs, setting a benchmark spending rate, and holding hospitals and other providers responsible for exceeding their target.

This marked the first time in decades that the state health department used its authority to block a hospital expansion because it undercut the state’s goals to control health costs.

The health policy commission, which works independently of the public health department but provides advice, has also required MGB to submit an 18-month cost-control plan by May 16, because its prices and spending growth have far exceeded those of other hospital systems. That was a major reason the growth in state health spending hit 4.3% in 2019, exceeding the commission’s target of 3.1%.

This is the first time a state agency in Massachusetts or anywhere else in the country has ordered a hospital to develop a plan to control its costs, Hensley-Quinn said.

 

[bave]

Each state can pursue their own path obviously, I wish the feds would get out of their inteventions and actually let states have a more free hand on these matters. This is a common issue when I have gone down the CON route before and it is one of the major ways states make demands on healthcare businesses.