Mass General dinged for spending growth by state regulator – Healthcare Dive

Dive Brief:

Mass General Brigham’s spending has raised significant concerns about the state’s ability to meet its benchmark cost growth target, Massachusetts health regulators said Tuesday. The state’s largest health system must now submit a performance improvement plan to regulators.
This is the first performance improvement plan the Health Policy Commission has ever required, the commission said Tuesday.
Under the PIP, Mass General will now have to identify the causes of the spending growth, attach a savings goal and list the specific steps it will take to meet its target, according to the process Health Policy Commission lists online. Mass Gen will be subject to monitoring by HPC during an 18-month period.

Dive Insight:

To achieve Massachusetts’ ambitious goal to contain healthcare cost growth, the Health Policy Commission sets a cost growth benchmark each year, and measures payers and providers performance against that benchmark rate.

Payers and providers can be held accountable when their spending is greater than the benchmark. In Massachusetts, total healthcare expenditures exceeded the benchmark rate of 3.1% in 2018 and 2019, growing at 3.6% and 4.3%, respectively.

In its analysis of Mass Gen’s spending and performance, the Health Policy Commission found its hospital and physician prices are higher than almost all other providers in the state. Overall, these prices are a key driver behind spending at Mass Gen — not increased utilization.

“Unless addressed, MGB’s spending performance is likely to continue to impact the state’s ability to meet the benchmark,” presentation documents from Tuesday’s HPC meeting said.

The HPC believes that a performance improvement plan “could result in meaningful, cost-saving reforms,” according to the presentation.

Mass Gen said it strongly disagrees with the commission’s decision.

The health system said HPC was selective in the data it used to assess the system, and that it didn’t take into account that Mass Gen treats “the sickest and most complex patients” in the state.

“The HPC’s refusal to acknowledge the acuity of our patients in its judgment of health care spending is short-sighted and unfair, especially to patients,” Mass Gen’s statement reads.

However, in HPC’s report, it noted that the case mix index, which measures patient acuity, is “not significantly higher” than other providers with lower price points.

In a separate action, HPC is advising against Mass Gen’s $2.3 billion expansion plan.

The projects are likely to increase healthcare spending, insurance premiums and negatively impact access and equity of care, according to a letter from HPC Chair Stuart Altman to state’s public health department, which reviews such projects.