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BOSTON (State House News Service) — Nearly three years after regulators ordered Mass General Brigham to take steps to better control spending, the health system says it managed to save nearly $200 million over an 18-month window by cutting outpatient rates, reducing the use of certain services, and shifting some care to lower-cost settings.
MGB had initially opposed the state directive encompassed in a novel performance improvement plan (PIP) but promised to work with the agency, and regulators now plan to monitor whether the savings persist long-term.
The Health Policy Commission Board on Thursday voted to end its first PIP process, an accountability effort the agency launched in early 2022 after identifying a "spending problem" that state officials feared could also jeopardize the statewide goal to keep health care cost growth under control.
Commissioners agreed MGB was successful in implementing the PIP, and the agency said "MGB's spending growth was meaningfully reduced and MGB's pricing was likely modestly reduced relative to the market."
"We appreciate MGB's commitment to this important public accountability process and commend them for meeting the savings target, recognizing that this work was completed during a time of significant challenges in the state's health care system," said Deborah Devaux, HPC Board chair. "Going forward, our focus will be on whether MGB can sustain and expand these efforts, as our state's health care affordability is worsening."
The Mass General Brigham system encompasses 16 institutions, including medical centers and specialty hospitals, and has 80,000 employees. MGB used 10 strategies to control costs over its improvement period, according to the HPC.
MGB saved $85.3 million by reducing outpatient rates at its two academic medical centers, Massachusetts General Hospital and Brigham and Women's Hospital. The system saved $24.8 million by reducing prices at its Waltham outpatient facility, and $29.5 million by cutting rates for MGB Health Plan's ConnectorCare members.
Another $14.4 million in savings came from reducing CT and MRI scans, including reducing unnecessary imaging, plus $24.9 million through a care management program for patients with "complex health issues who can be managed in the primary care setting," the HPC evaluation said.
MGB aimed to save $176.7 million from October 2022 to March 2024 under its approved plan, but the system ultimately reached $197.1 in savings, the HPC said.
"With the completion of the nation's first-ever PIP, the HPC – in collaboration with MGB – proved that this process can be effective, even in the context of considerable health system pressures," HPC Executive Director David Seltz said in a statement. "Nonetheless, the need for broader policy action remains urgent in order to meaningfully impact statewide spending trends and improve affordability for all Massachusetts residents."
Regulators say MGB implemented improvement strategies in "good faith" and achieved its targets. Still, the HPC raised the possibility of requiring another PIP "if MGB’s spending growth is excessive in the future."
The HPC, an independent state agency tasked with cutting health care spending, was established in 2012 through a law that also created the health care cost growth benchmark. Lawmakers this session have considered strengthening the HPC's authority and overhauling how regulators manage health care costs amid the Steward Health Care crisis, though bills passed by both branches have stalled in conference committee.
David Cutler, chair of the HPC's Market Oversight and Transparency Committee, said the "PIP process worked."
"There was a lot of issues at the start about would it be successful and so on," Cutler said. "And I think, thanks to our efforts and certainly MGB's efforts, I think what we've learned is that it can be done. It can be done well and it can have lasting impact, so this is like real, real savings for the people of Massachusetts."
Cutler said the PIP process is not the only tool regulators need to make an impact.
"This happens afterward, not in advance. It's trying to patch things up," Cutler said as he urged the agency to continue "all of our other efforts," without providing specific details. He added, "If you thought of this strategy as being the HPC strategy, this by itself is not going to be it."
From 2014 through 2019, MGB's above-benchmark unadjusted spending growth for commercially insured patients was $293 million, a figure the HPC said exceeded "any other Massachusetts provider or system" and was a catalyst for the agency requiring the PIP. Other concerns included the system having higher spending levels for patients, higher hospital and physician prices than most providers, and its use of higher-intensity services or settings.
After the HPC unanimously voted to require a PIP in January 2022, MGB said it "strongly disagreed" with the decision but pledged to work with the agency to address health care costs "while continuing our efforts to overcome the multiple crises brought by the pandemic." MGB claimed state regulators had used "outdated financial details" and the HPC was "selective" in using unadjusted numbers "that ignore the role of our academic health centers in treating the sickest and most complex patients in the Commonwealth."
In a final evaluation report Thursday, the HPC said spending growth for Partners Community Physicians Organization, MGB's largest physician group, exceeded the cost growth benchmark between 2022 and 2023.
Still, the HPC said that "ongoing disruptions to the health care system as well as other pressures, such as increasing pharmaceutical spending, impacted many organizations during this time, resulting in high average growth across the market."
MGB's spending growth was "generally below average" from 2022 to 2023. The health system's "unadjusted spending growth during this time was 0.1 to 5.7 percentage points below the network average growth for the four major local payers," which the HPC says shows the improvement plan worked.
Regulators say MGB's long-term savings are contingent on future pricing.
"MGB's rate increases in recently finalized agreements suggest that MGB is not recouping the savings generated under the PIP Price Reductions strategies in current payer contracts," the HPC wrote.
The agency added, "Given the role of pricing in driving MGB's historically high spending growth, the long-term sustainability of the PIP savings will depend on MGB maintaining a commitment to keep pricing at levels consistent with compliance with the benchmark, including in value-based care arrangements."
MGB spokesperson Jessica Pastore said the system "delivered meaningful and sustainable solutions to cost growth in the Commonwealth."
"We appreciate the collaborative approach from the HPC in this endeavor," Pastore said. "We are committed to continuing to drive these savings, as well as seeking other areas for affordability, while investing in solutions to address both cost and access in order to build a sustainable future for our patients, providers, and stakeholders across the Commonwealth."
Other challenges could be ahead for the health system, as primary care physicians at MGH and BWH plan to hold an information picket on Friday, which organizers say is in response to MGB's refusal to recognize their unionization efforts.
"We are doing this because we want to change the way our healthcare system works for our patients. Every day, we are seeing patients suffer from a system that prioritizes profit over care," Dr. Elsa Imbimbo, a physician at MGH Internal Medical Associates, said Thursday. "We need to act now to change that."
Written by Alison Kuznitz/SHNS
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