On Thursday, November 14, 2024, the Massachusetts Health Policy Commission (HPC) hosted its 12th Annual Health Care Cost Trends Hearing, titled From Crisis to Stability: The Path to a More Affordable, Accessible, and Equitable Health Care System. Materials from the hearing, including a recording of the full event, are available on the HPC's website.
This year, in the wake of the considerable harm caused by the bankruptcy of Steward Health Care and other recent market disruptions, the HPC focused the 2024 Health Care Cost Trends Hearing on moving forward from crisis to stability and building a health care system that is more affordable, accessible, and equitable for all residents of Massachusetts.
The discussions at the hearing among health care industry representatives, policymakers, and community leaders focused on the substantial toll on communities, patients, provider organizations, and health care workers across the Commonwealth. Panelists highlighted ongoing challenges of capacity constraints, financial volatility, administrative burdens, and workforce recruitment and retention issues, alongside the reality that an increasing number of Massachusetts residents are struggling with health care affordability, medical debt, and health disparities.
The HPC’s annual Health Care Cost Trends Report and Policy Recommendations provide a foundational basis for the hearing each year. The 2024 report and policy recommendations are available on the HPC’s website.
Pre-filed Testimony
In advance of the hearing, 34 health care organizations (25 provider organizations and 9 payers) – were required to submit written testimony, responding to questions from the HPC and the Office of the Attorney General. The full text responses from all 34 organizations, in addition to a summary of themes is available on the HPC’s website.
Featured Speakers
Opening Remarks from Massachusetts Leaders
Attorney General Andrea Joy Campbell acknowledged the significant toll that the Steward bankruptcy has had on patients, providers, and communities across the Commonwealth, compounded with the continued recovery from the COVID-19 pandemic, escalating health care prices, and affordability challenges for Massachusetts residents. Attorney General Campbell focused her remarks on her office’s work to prepare for the years ahead, in the wake of not only the Steward bankruptcy crisis but the election of former President Trump as well. The Attorney General emphasized that she is “prepared to ensure that the next generation does better than the last, especially when it comes to health outcomes.”
Attorney General Campbell outlined her priorities for the upcoming legislative session, including increasing oversight and accountability to ensure that state agencies like the HPC have the authority needed to protect Massachusetts consumers. The Attorney General emphasized that failure to report spending and organizational data to the HPC and CHIA should be met with steeper penalties, and “there is no excuse” that some entities fail to report.
Continuing her discussion of legislative priorities, Attorney General Campbell cited concerning findings from the Attorney General Office’s 2024 Health Care Cost Trends Report, including that increasing numbers of Massachusetts residents — particularly Black, low-income, and female residents — are grappling with medical debt. She called for legislation to protect Massachusetts residents who are facing unaffordable medical bills.
Attorney General Campbell expressed hope that progress can be made through legislative action, and closed by emphasizing to all in the room that “you have a partner in the AG’s office, and we are here to work and get things done on behalf of the people.”
Attorney General Campbell’s remarks start at the 1:14:26-minute mark in the Cost Trends Hearing recording.
Governor Maura Healey acknowledged the ongoing challenges that residents of the Commonwealth face due to increasingly unaffordable and inaccessible health care. The Governor focused her remarks on what comes next in the wake of the Steward bankruptcy, the legislative progress her administration has made in the health care sector thus far, and the importance of equitable investments in the Commonwealth’s primary care infrastructure.
Regarding the Steward bankruptcy, Governor Healey said, “We got an historically bad operator out of Massachusetts, and we saved six hospitals that were at risk of closing.” The Governor expressed appreciation for many of the people in attendance for their work to ensure access to care across the Commonwealth, specifically calling attention to the HPC and the ongoing working groups addressing the closures of Carney Hospital and Nashoba Valley Medical Center.
Governor Healey reflected on progress the Legislature made to expand access to affordable health insurance for low- and middle-income families, increase the quality of long-term care and maternal health care, and create new investment programs for the health care workforce. Governor Healey emphasized that “health care is and must be a priority for all of our residents” as she called for continued progress.
The Governor also stressed the importance of investing in primary care, calling for equitable reimbursements to all primary care providers to ensure their sustainability and reflected on the fact that the U.S. spends half of what other developed countries spend on primary health care. She emphasized the important work that Massachusetts community health centers do to provide critical access to primary health care and called for equitable reimbursements for these safety net providers.
Governor Healey closed by saying, “This is not business as usual.” She called for bold and innovative action to continue expanding access to equitable and affordable health care in the wake of market disruptions that should be seen as opportunities, rather than daunting challenges.
Governor Healey’s remarks and Q&A with HPC commissioners start at the 1:45:19-minute mark in the Cost Trends Hearing recording.
Witness Panels
The hearing included four witness panels, comprised of health care leaders whose work spans the Massachusetts health care system, moderated by HPC commissioners.
Witness Panel #1 – What Comes Next? The Future of Former Steward Hospitals and Physician Network
Moderated by HPC Commissioner Martin Cohen
Purpose: The first witness panel convened the new operators of Steward Health Care’s former hospitals and physician network to discuss their strategies for moving forward from the fallout of the Steward dissolution, their visions for the future, and the opportunities and barriers they consider for the state’s goals on affordability, access, and equity.
Participants:
- Dr. Abha Agrawal, President and CEO, Lawrence General Hospital
- Dr. Alastair Bell, President and CEO, Boston Medical Center Health System
- John Fernandez, President and CEO, Brown University Health
- Benson Sloan, CEO and Founder, Revere Medical
In response to a question from Commissioner Foley on how to maintain access after state support is withdrawn, Dr. Abha Agrawal, President and CEO, Lawrence General Hospital, stated that beyond maintaining quality access, “We are working on comprehensive, integration framework and processes which happens at multiple levels – an intramural integration, looking at human level integration within the organization, to ensure the workforce and staff feel like we are part of one family, as well as technological integration, creating one patient record so information flows seamlessly within the continuum of care and standardizes processes across the board.” Dr. Agrawal emphasized the needs for “technological equity,” which she called “tech-quity,” to increase digital health equity within the community. “Many times, larger organizations and academic medical centers get what good technology has to offer and that creates inequities, digital health inequity, we would like our patients and our teams to get the benefits of the same innovations.”
In response to Commissioner Foley’s question on maintaining access, Dr. Alastair Bell,President and CEO, Boston Medical Center Health System stated, “The state stepped forward to help these acquirers to keep services going. But what is important is the underlying financial model of these institutions given they are all receiving significant funding from the state. Safety net providers don’t have the ability go to third party payers or reset reimbursement rates and we are beholden to the health care cost growth benchmark. We need different payment models for high government payer institutions and need to change incentives to focus less on pushing people through the healthcare system and more on how we think about lower unit cost care at scale in communities.”
In response to a question from Vice Chair Martin Cohen regarding strategies the new operators are implementing to retain quality, contain costs, and restore patient trust, John Fernandez, President and CEO, Brown University Health, said, “Trust is earned, and we do that by showing up.” He added, “There’s great staff there, but there’s a lot of work to do, so I think trust will be built over time. Some of the things we are doing very specifically is we’re putting our electronic medical record in those hospitals. We’re making those investments in those hospitals and the clinics also to recruit physicians.”
In response to a question from Vice Chair Cohen regarding what assurances Revere Medical could provide that they will engage in state reporting requirements, Benson Sloan, CEO and Founder, Revere Medical replied, “Building trust takes time and Revere Medical doesn’t expect it to be given but earned. They want to engage and collaborate with the state, the HPC as a registered provider organization, and with their providers to work together and restore trust.”
The first witness panel begins at the 2:13:11-minute mark in the Cost Trends Hearing recording.
Key Themes:
- Guided by the local leaders and workforce members at the former Steward Health Care institutions, the new operators are focused on opportunities to provide local, integrated, high-quality, affordable, community-centric, and culturally competent care, guided by health equity, in their respective communities. In many cases, this builds on longstanding, pre-existing clinical relationships.
- The depth and degree of moral injury from the crisis is extensive among staff, patients, partners, and the communities served. The new operators must begin by working to build trust and reinforce feelings of safety and caring, which will take time.
- The new operator of the Steward Physician Network, Revere Medical, asked for a chance to build trust with the Massachusetts health care system by engaging with the HPC, registering with the HPC’s Registration of Provider Organizations program, and providing periodic updates to the HPC.
- Panelists suggested that Massachusetts should re-examine reimbursement rates and that providers, payers, and the government need to wrestle with the idea of different models applied to very high government payer organizations that provide a different incentive, or else we will be back with an undercapitalized safety net and in the same situation again.
- The primary care physician shortage requires addressing the issue of lower reimbursement rates for these doctors compared to other specialties to attract more graduating students.
Witness Panel #2 – Putting Patients First: Voices of Impacted Providers, Workers, and Communities on Recent Disruptions
Moderated by HPC Commissioner Alecia McGregor
Purpose: The second witness panel convened community leaders directly affected by the bankruptcy and dissolution of Steward Health Care about the experiences of and impact on the affected health care workforce, communities, and patients, to discuss their perspectives on building a more resilient, affordable, and equitable health care system.
Participants:
- Dr. Guy Fish, CEO, Codman Square Health Center
- Susan Joss, CEO, Brockton Neighborhood Health Center
- Caridad Medina, Vice President, Steward Health Team, 1199SEIU United Healthcare Workers East
- Dr. Bisola Ojikutu, Commissioner of Public Health and Executive Director, Boston Public Health Commission
- Julie Pinkham, Executive Director, Massachusetts Nurses Association
Notable Comments:
Commissioner Matilde Castiel asked panelists how we can learn from one another across the health care system, noting that the Central Massachusetts region is suffering in similar ways as those impacted by the Steward Health Care bankruptcy. In response, Dr. Guy Fish, CEO, Codman Square Health Center stated, “We don’t have a health care system, we have a health care industry. A system connotates some degree of planning and connectivity and learning. We have an industry which the participants maximize self-interest.” He emphasized the need to invest in critical cross-sector partnerships, where payors and providers better understand each other, which could lead to lower costs.
In response to a question from Commissioner McGregor on how Steward facilities closures have impacted the communities that panelists represent, Susan Joss, CEO, Brockton Neighborhood Health Center, said, “The Steward bankruptcy is just a piece of what is going on.” In outlining the crises that Brockton’s health care facilities have faced in recent years, she added, “We need to stabilize and strengthen the community health centers, because we can be so much more than we are when we’re just bouncing from crisis to crisis.”
Caridad Medina, Vice President, Steward Transition Team, 1199SEIU United Healthcare Workers East, added, “Because of these closures, more than 1,000 of our members lost positions. We worked really quickly to try to get them into the sister hospitals. We, unfortunately, didn’t get to place all of those workers. There were only about 101 that took positions, so hundreds of members left. We’re afraid that they left the health care system period.”
Dr. Bisola Ojikutu, Commissioner of Public Health and Executive Director, Boston Public Health Commission, later added, “This breaking point presents us with an opportunity to evaluate the entire ecosystem of our healthcare system and make structural changes to the ways in which care is delivered and paid for.”
Commissioner Patricia Houpt commented on the widespread impact of Nashoba Valley Medical Center’s closure because of its large catchment area, leading to increased emergency department wait times in Lowell, Concord, and even as far as Nashua, New Hampshire. In response, Julie Pinkham, Executive Director, Massachusetts Nurses Association, said, “I think that we need to not rule out small hospitals. Right now, it feels like we’re throwing the baby out with the bath water. We’re just closing the small hospitals, and I don’t think it’s making the situation any better. It’s driving everybody into the academic medical centers, which are more costly.”
The second witness panel begins at the 3:20:20-minute mark in the Cost Trends Hearing recording.
Key Themes:
- The Steward Health closures did not create an entirely new crisis, but exacerbated existing inequities in our health care system, with especially devastating rippled effects for marginalized and vulnerable communities. Panelists also expressed a need to come together to improve a broken system by addressing the root causes.
- Community health centers, safety net hospitals, and social service organizations that primarily serve patients with public insurance are seeing a dramatic rise in acuity and volume, requiring greater time, staff capacity, and resources to care for their patients, but continue to be paid substantially lower rates than providers and organizations that primarily serve commercially insured patients.
- There are short-term and long-term consequences to the closure of Steward hospitals – immediate stress on patients and workforce, long-term economic fallout in those communities which will likely have additional impacts on individuals’ health, including loss of health coverage or delay of preventative care.
- The Steward hospital closures highlighted the need to examine health ecosystems and not isolate health care providers. As with the collaboration displayed during the COVID-19 pandemic, there is a need to return to that level of communication, collaboration and identifying goals that benefit the whole community through state health care resource planning.
- The health care workforce is extremely burnt out from being overworked, underpaid, under-resourced, and having to continuously adapt to crisis after crisis. Panelists shared that Massachusetts must continue to pursue innovative solutions to attract and retain this critical workforce, and to use the feedback and experience of frontline workers to guide these reforms.
HPC Executive Director David Seltz: Presentation of Health Care Cost Growth Drivers and Implications
Following the lunch break, HPC Executive Director David Seltz shared recent findings on the current drivers of health care cost growth and the implications of health care becoming increasingly unaffordable for residents of the Commonwealth.
Executive Director Seltz noted that commercial health care spending growth in Massachusetts was higher than the U.S. average, higher than inflation, and higher than wage growth, and increasing prices are the primary driver of this spending growth. Along with high prices, the Massachusetts health care system faces interrelated issues of high use of hospital care and lack of investment in primary care, behavioral health workforce shortages, access challenges, and increasing affordability issues. Massachusetts has the second highest family insurance premiums in the country, and the annual average cost of health care for a family now exceeds the cost of housing in most parts of the state.
Executive Director Seltz urged that these significant challenges require collaborative and innovative solutions. His presentation begins at the 5:04:26-minute mark in the Cost Trends Hearing recording. The presentation slidesare available on the HPC’s website.
Witness Panel #3 – From Crisis to Stability: Industry Leaders on the Threats and Opportunities Facing the Commonwealth’s Health Care System
Moderated by HPC Chair Deborah Devaux
Purpose: The third witness panel convened health care leaders to provide their perspectives on the current state of health care in Massachusetts, focusing on the impacts of Steward closures and other challenges across the market, with the goal of defining a path forward.
Participants:
- Eileen Auen, Executive Chair of the Board of Directors, Point32Health
- Dr. Eric Dickson, President and CEO, UMass Memorial Health
- Sarah Iselin, President and CEO, Blue Cross Blue Shield of Massachusetts
- Dr. Anne Klibanski, President and CEO, Mass General Brigham
Notable Comments:
In response to Chair Devaux’s question on challenges facing the health care industry and possible solutions, Eileen Auen, Executive Chair of the Board of Directors, Point32Health stated, “There’s pressure for continued unit cost increases from providers due to inflation. But from our perspective, it’s hard to keep paying more and keep driving the spiral of the lack of affordability of healthcare to our members. And the cost-shifting. It’s a spiral.”
Auen continued, “We should set a benchmark with teeth, set an audacious goal and try to control costs. And reimagine our model and move more care back into our communities and get people care where they need it, in the home. Our ability to be innovative about those things is the only things that will fix this. How do we contain this in the short term and then do this hard work of innovation and reimagining how we deliver health care?”
Dr. Anne Klibanski, President and CEO, Mass General Brigham added, “Community hospitals in this country and in this state are under siege, and at the same time, the larger health care systems are increasingly fragile and less stable, and access couldn’t be worse. Capacity is at its highest, outpatient is at its lowest. This gives us a real opportunity to consider how we can deliver lower cost care closer to home, or even in the home.”
In conversation, Sarah Iselin, President and CEO, Blue Cross Blue Shield of Massachusetts, cited a need to “Continue to make progress on value-based care, and fund doing things in a different way.” Dr. Eric Dickson, President and CEO, UMass Memorial Health, responded, “We’ve been doing it for 15 years and it hasn’t worked – are we going to keep on going for 15 more years? No other country in the world does it that way, we’re trying to invent something new that doesn’t work,” and instead called for shifting the fee schedule. Ms. Iselin responded, “But back to where we started this meeting around what we can afford, shifting the fee schedule can’t be about paying more because we cannot afford it. How do we lean in together, how do we realign the financial incentives inside what we are paying now? I welcome the opportunity to do that with anyone in the state.”
The third witness panel begins at the 5:03:27-minute mark in the Cost Trends Hearing recording.
Key Themes:
- Panelists called for policy solutions to address known challenges in affordability and health inequities.
- The need to incentivize spending on primary and preventive care and behavioral health rather than emergency department and hospital care.
- Ongoing workforce shortages, inflationary headwinds, spending impacts of pharmaceuticals, and increasingly complex patient needs.
- Massachusetts has seen the highest rates of health care cost growth in 10+ years, and the health care cost growth benchmark could be updated to better encompass health care affordability.
- Panelists noted that hospitals are at “disaster capacity” system-wide and are aiming to reduce the amount of lower-acuity care that is being delivered in hospitals by bringing care into the community through Hospital at Home and other programs.
- Panelists outlined the issue of patients being in the hospital too long and too often, noting challenges with utilization and an inability to get people out of the hospital.
- Payers consider the impact of premium growth on their members every day, as they struggle with increasingly hard and increasingly public negotiations with providers. These panelists noted that providers request high-rate increases driven by inflation that would be unaffordable for their members.
- Providers stressed the state needs to increase Medicaid payments to support safety-net and high public payer hospitals.
Witness Panel #4 – The Cost of Inaction: Building Consensus on Policy Solutions to Achieve Health Care Affordability, Accessibility, and Equity for All
Moderated by HPC Vice Chair Timothy Foley
Purpose: The final witness panel convened health care leaders and stakeholders to identify the most urgent issues facing Massachusetts health care today, and to identify not only the policy actions needed to address these issues, but also a path toward building the consensus needed to enact these changes. Panelists reflected on the themes discussed in earlier panels, and outlined their strategies toward advancing health care affordability, access, and equity goals while supporting and stabilizing the health care system.
Participants:
- Michael Curry, President and CEO, Massachusetts League of Community Health Centers; Co-Founder, Health Equity Compact
- Lora Pellegrini, President and CEO, Massachusetts Association of Health Plans
- Amy Rosenthal, Executive Director, Health Care For All
- Steve Walsh, President and CEO, Massachusetts Health and Hospital Association
Notable Comments:
When asked by Director Seltz about which policies panelists recommend to protect the system from private equity actors, Michael Curry, President and CEO, Massachusetts League of Community Health Centers, stressed, “Our level of investment in community hospitals and community health centers reflects what we think of those communities and how much we care about them – we need to make clear that we care about all communities. We also need to do contingency planning, so communities still know where to go and what to do when they need care and their local point of care has closed.”
Amy Rosenthal, Executive Director, Health Care For All, added, “When there are issues with the system and crises unfold, we need to involve impacted communities in a genuine way from the beginning of the process. That needs to be a policy in place moving forward. The voices of the people impacted need to be at the table.”
Steve Walsh, President and CEO, Massachusetts Health and Hospital Association, said, “Private investment is going to be necessary in order to keep our health care system afloat, so we need to develop guardrails to ensure that we can have the successful private investment that our health care system needs.”
In response to Commissioner Foley’s question on what is needed to move from the status quo to a new trajectory, Lora Pellegrini, President and CEO, Massachusetts Association of Health Plans said, ”I would be remiss if I didn’t start with cost containment. Premiums are a direct reflection of what we’re spending in health care, whether it be on the provider side, pharmaceuticals, or if we give a particular segment of providers mandated increases. All of these costs are reflected in your premiums, so we need to be thoughtful about cost containment.”
The fourth witness panel begins at the 6:24:46-minute mark in the Cost Trends Hearing recording.
Key Themes:
- Panelists advocated that Massachusetts should give the cost growth benchmark teeth and think about ways to reform the system so that the cost growth benchmark is achievable.
- Panelists stated that everyone should be part of the affordability and rising cost discussion, including pharmaceutical companies and pharmacy benefit managers who are not subject to the state oversight framework including the cost trends hearing.
- Guardrails are needed to ensure transparency and accountability for private equity involvement in the health care system.
- Massachusetts needs to invest in primary care, and ideally embed behavioral health into primary care.
- Affordability standards for health insurance and premiums should be established and enforced.
- If and when crises unfold in the health care system, there needs to be a policy of meaningfully engaging with the impacted communities, not only to share necessary information, but also to better understand experiences on from the front lines and what matters most to them.
Public Testimony
In advance of the hearing, the HPC called for and accepted oral and written testimony from members of the public.
During the hearing, oral testimony was provided by Dr. Amie Shei, President and CEO, The Health Foundation of Central Massachusetts, and Eileen McAnneny, President, Employer Coalition on Health.
The oral public testimony can be found at the 7:16:30-minute mark in the Cost Trends Hearing recording. The written public testimony is available on the HPC’s website.
Reflections and Discussion
The HPC Board of Commissioners shared reflections and key takeaways to close out the hearing. Commissioners agreed that the Massachusetts health care system is on an unsustainable trajectory for health care providers, patients, health plans, and the Commonwealth. Commissioners emphasized the urgent need for action, noting that small, incremental change will not solve the health system’s issues.
Commissioners urged that the Commonwealth’s health care industry must convene all participants across the health care system and foster collaboration to address system-wide problems -- much like the collaboration that emerged during the COVID-19 pandemic. Commissioners noted that this current moment marks another opportunity to work together to find cost-effective, innovative, and patient-forward solutions for ongoing health care market stability, affordability, access, and equity challenges.
Commissioners echoed witnesses’ calls for revitalized state health planning efforts, noting demonstrated need for health care leaders to work together to engage with communities and ensure that health services align with community health needs to better serve historically vulnerable populations.
The Commissioners’ reflections and discussion begin at the 7:28:05-minute mark in the Cost Trends Hearing recording.
