Mass General Brigham health care spending growth was meaningfully reduced during the 18-month improvement plan
Sustainability of cost savings will depend on MGB’s long-term commitment to the state’s health care cost growth benchmark
BOSTON — Today, the Massachusetts Health Policy Commission (HPC) Board voted to conclude the Performance Improvement Plan (PIP) of Mass General Brigham (MGB), finding that MGB successfully achieved its savings target of $176.7 million and that MGB’s spending and pricing trends were reduced during the PIP. This marks the conclusion of the first PIP required under the Commonwealth’s health care cost growth benchmark accountability process overseen by the HPC. Slides from the public presentation and the HPC’s Final Evaluation Report are posted to the HPC’s website.
In January 2022, the HPC voted to require a PIP from MGB, the state’s largest health care system, after finding that MGB’s spending performance raised significant concerns and had likely already impacted the state’s ability to meet the health care cost growth benchmark. Subsequently, MGB worked closely and collaboratively with the HPC to define and implement a set of activities to meaningfully reduce its spending during the PIP implementation period from October 2022 to March 2024.
MGB undertook ten strategies to achieve its savings target, grouped into the categories of Price Reductions, Reducing Utilization, and Shifting Care to Lower Cost Sites. The majority of the target savings ($125 million, 70%) was associated with the four Price Reduction strategies. At the conclusion of the PIP implementation period, MGB submitted its own evaluation of its PIP, reporting that it had achieved total savings of $197.1 million during the 18-month PIP performance period, exceeding the target in its approved PIP of $176.7 million.
The HPC closely monitored MGB’s performance throughout the PIP and conducted its own analysis. Based on this examination, the HPC voted today that the PIP was successful, finding:
- MGB implemented the PIP in good faith and achieved the savings target set forth in its approved PIP.
- During the PIP, MGB’s spending growth was meaningfully reduced and MGB’s pricing was likely modestly reduced relative to the market.
- MGB has provided some evidence of sustainability after the PIP performance period, but long-term sustainability will depend on MGB’s future pricing.
Also at the HPC meeting, staff from Office of Attorney General Andrea Campbell presented findings from their most recent cost trends examination report focusing on health care affordability. The report found wide variation in cost sharing expenditures and member premium contributions as a percentage of household income across different regions and zip codes of the state. The report called for policymakers to consider establishing an “affordability benchmark” to enhance consumer protections around collection and reporting of medical debt, and to maintain enhanced subsidies for the state’s Health Connector members.
“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 concept of a performance improvement plan as a mechanism to hold health systems accountable to the health care cost growth benchmark and deliver meaningful savings was untested – until now. 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,” said HPC Executive Director David Seltz. “Nonetheless, the need for broader policy action remains urgent in order to meaningfully impact statewide spending trends and improve affordability for all Massachusetts residents.”
HPC Executive Director David Seltz continued, “Many of the strategies successfully implemented by MGB during this PIP are consistent with HPC policy recommendations for the entire health system, such as addressing high commercial price growth and variation, rationalizing hospital outpatient payment rates, and shifting care to lower cost settings. We look forward to working with policymakers and industry leaders to catalyze greater adoption of these successful strategies across the state.”
The HPC will continue to closely monitor MGB’s spending and pricing performance and may require a subsequent PIP if MGB’s spending growth is excessive in the future.
MGB PIP materials, information on the HPC’s market oversight role and PIP authority, presentation materials and a recording of the meeting are available on the HPC’s website.
