The Time to Act on Medical Costs Was Now!

By Gustave H. Murby

If Governor Baker and Secretary Sudders want to look the other way and ignore the towering negative impacts projected to stem from Boston Children’s Hospital’s $1 billion construction project, we do hope they got something for it on our collective behalf…but we have our doubts.

You may be surprised that Boston Children’s Hospital (BCH) is still locked in a legal battle over their state approval with wimpy safeguards imposed on them and their $1 billion building, which will add over 70 beds to an already over-bedded pediatric inpatient marketplace.

Yes, although the Massachusetts Department of Public Health (DPH) issued a Determination of Need (DoN) allowing BCH to destroy the world-famous Prouty Garden, we want the world to know that the Friends of Prouty Garden are still here.

 Of course, BCH could restore Prouty Garden anytime it comes to its senses. Our fight to save this iconic healing garden, recognized as a model for modern hospitals and other medical facilities, continues for an even more important social and medical purpose. 

Little did we know that we, the Friends of Prouty Garden, would be thrust onto the battlefield as the champions for health care access and affordability in the Commonwealth. Circumstances forced us to become students of health policy. We’ve come to learn as follows:

An incredible market dysfunction exists with our large health care providers. BCH is the poster child for a monolithic institution behaving badly. Rather than advancing something accessible and affordable, this huge project would sponge profits from wealthy international patients, at the expense of Massachusetts residents bearing the burden of BCH’s tax exempt status. To make matters worse, the international and domestic political climate ensures that those international patients will not come, and we will be left footing the bill. “If you build it, they will not come!” Indeed, they’ve stopped coming already.

The system of governmental oversight by Massachusetts DPH has failed. DPH is charged by the Determination of Need law to ensure health care resources will be made equitably available to every person within the Commonwealth. It is one of the most important consumer protection laws on our books.  In addition, this must be done at the lowest reasonable aggregate cost in order to advance cost containment goals and improved public health outcomes. DPH, by its actions, has abandoned that role by kicking the can down the road of the project’s cost impacts.

The Baker Administration abandoned its ‘good government’ pledge. Under the Baker Administration’s control, DPH essentially ignored the grave concerns of its much-better-informed sister agency the Health Policy Commission (HPC). The HPC, charged by statute with monitoring health care spending and market function, exercised its discretion to comment on this DoN because of its significant worry that this project would increase future health care spending and lead to the closure of more efficient, quality providers.

The HPC said so, on the record. DPH went ahead anyway. 

Until this BCH project, that HPC right-to-comment had never before been exercised. Our knowledge grew in February 2016 when former HPC Commissioner, Dr. Paul Hattis, noted worries about the cost growth implications of this massive project, and publicly called for the HPC to review its cost implications and share those with DPH in a transparent way.

 In late September 2016, HPC agreed and, much to its credit, did just that. (Bravely, we are told, because the Baker Administration strongly objected to the HPC even weighing-in with its comments.) HPC’s September 27, 2016 comment letter to DPH noted several things.

 First, HPC rejected flawed conclusions by a BCH-selected consultant that the new proposed beds would be filled by out-of-state patients. As publicly noted by HPC Chair Stuart Altman, “… [it is] very unlikely that Children’s would be able to fill new beds without taking a greater share of local patients.”

 Secondly, in dollars and cents terms, the HPC analysis conservatively projected that commercial health care spending could rise over $18 million a year, due to market share shifts to BCH.

 Thirdly, the HPC predicted that BCH would see its current statewide percentage of pediatric commercial discharges rise from 46% to between 55-65%. This would mean that other pediatric providers—like Tufts Floating Hospital—are at-risk to lose commercial patients due to BCH’s expansions, so much so that they may go out of business.

 The HPC report forced DPH to hastily add conditions to the project approval to try to justify it. Unfortunately, according to policy experts, those conditions are so inadequate they cannot possibly protect against, or even mitigate, the harms that HPC predicted will result from this project. By their nature, even if they were effective, these conditions will document failure AFTER the damage has already been done.

 For example, the conditions do not assure that BCH will continue to serve children on Medicaid with complex illnesses. They do not require that BCH demonstrate that there is adequate out-of-state demand for the new beds, to protect other more efficient pediatric providers from losing market share.

 They do not protect Massachusetts premium-payers from bearing the costs of the new beds that go unfilled by out-of-state patients. This will force BCH, for its own financial stability, to place Massachusetts commercial patients in them instead.

 The DPH’s approval did require BCH to report whether non-Massachusetts patient volume is actually meeting projections to support the new building. As of now, BCH already failed to provide this essential data, frustrating the whole purpose of the monitoring process by ducking the establishment of a baseline against which future trends can be assessed.

 How can Massachusetts expect to have a more affordable health care system, with some hope of taming out-of-control behavior by our providers, if our governmental agencies and leadership simply ignore or flout the oversight work that our legislature charged them to do?

 Our opinion is that the Baker Administration gave Boston Children’s Hospital a pass. We naturally wonder if there was a ‘political deal’ between the executive branch and BCH that translates. We do know that the Governor and the CEO of BCH took a personal meeting at a very opportune time, when both the Determination of Need decision regarding this project and the future willingness of BCH to accept payment terms that would be supportive of the state’s new Medicaid ACO program were pending. We have the agenda of that meeting and those are the only two topics on it.

 In three to five years, when Massachusetts is lamenting its inability to control health care costs, remember this—remember when the state chose not to act on a clear forecasted threat from its own health care costs watchdog agency.

 The time to act was now!

 Gustave H. Murby is a spokesperson for the Friends of Prouty Garden and a member of the plaintiff group that is challenging DPH’s approval of BCH’s proposed building project on the former site of the Prouty Garden