Hospital deal squeezes health care watchdog agency

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BOSTON – The outgoing head of the health care agency whose funding will be drawn down to pay for an accord over health care provider pricing is questioning the impact the deal would have on struggling community hospitals.

Aron Boros, executive director of the Center for Health and Information Analysis, also said Thursday that the redirection of a portion of funding from his agency to boost the bottom lines of hospitals around the state will limit the agency’s ability to deliver on a consumer website he has been working to create with Gov. Charlie Baker’s administration for the past year.

“Our job is to look at hospital finances and understand hospital finances. That’s a core part of our mission and we understand deeply the challenges faced by community hospitals,” Boros said. “Given the scale of the financial challenges across the industry, $45 million over five years does not seem like it will make a significant difference in the long-run to the future of those hospitals.”

Boros said he was not consulted by Beacon Hill leaders during the development of the compromise.

Massachusetts lawmakers on Thursday fast-tracked legislation codifying the high-dollar health care financing deal brokered Wednesday between the state’s largest health care provider and the health care workers union behind a ballot campaign to restructure hospital payments.

Both the House and Senate passed the compromise bill just hours after Baker, a Republican, joined Democratic legislative leaders to announce the deal Wednesday. It would reconstitute a commission charged with examining variations in pricing in the health care industry and direct $120 million over five years in financial relief to hospitals across the state.

In return for passage of the legislation, a representative of United Healthcare Workers East, also known as Local 1199 of the Service Employees International Union, said it had agreed to drop its ballot question dealing with the issue and pledged to work with Partners HealthCare to ensure high-quality services for consumers.

The deal brokered behind the scenes by Beacon Hill leaders between the union and Partners, which stood to lose as much as $450 million in payments under the terms of the proposed ballot question, was intended to head off a costly and contentious campaign over the measure heading to election day Nov. 8.

Sen. James Welch, the co-chair of the Health Care Financing Committee, called the issue “far too critical to be put to a yes or no vote” on the ballot, and said the deal would “provide additional immediate relief to hospitals that have suffered from price variation.”

Interest groups have long pressured lawmakers to address health-care pricing disparities, but lawmakers have been unable to agree on a path forward. The ballot question appears to have forced their hand.

The special commission created under the bill, to be co-chaired by Welch and Rep. Jeffrey Sanchez, would have to start meeting by Sept. 15 and meet monthly after that before producing a final report with findings, policy recommendations and potential draft legislation no later than March 15, 2017.

“We need to tackle the issue of unwarranted hospital price variation in the commonwealth. This bill allows us to do that, by averting the ballot question, pricing immediate relief to hospitals in need and requiring the development of an actual policy recommendation next year, early next year,” Welch said.

But before the Senate voted unanimously 39-0 in favor of the bill, Sen. Michael Barrett, a Lexington Democrat, lamented what he called “a gratuitous bit of violence” against the information agency.

“We are essentially gutting the Center for Health Information and Analysis,” Barrett said. The agency was empowered in 2012 as part of a major health care cost containment law.

Rather than redistributing money within the hospital industry as the ballot question would have done, the agreement authorizes $45 million over the next five years from existing assessments to be distributed to hospitals with relative prices below 120 percent of the statewide median.

The hospital funding would be redirected away from the information agency, starting with $5 million in fiscal 2017 and $10 million a year thereafter. Secretary of Health and Human Services Marylou Sudders would also be authorized under the bill to expend up to $15 million a year in additional hospital reimbursement rates through MassHealth.

“This is significant collateral damage done to an innocent bystander, an entity that was doing the job we asked it to do. So while we have to get this question off the November ballot, we should recognize that for reasons not having to do with the Senate’s choices this very destructive act directed at a watchdog agency that was keeping the executive branch honest – this very destructive act – is going down,” Barrett said.

Barrett predicted an “exodus of talent” from the agency as a result of the deal.

Boros, who announced in April that he would step down on June 17, sad he shared some of Barrett’s concerns.

“What I primarily worry about is the ability to attract and retain a high quality leader for CHIA in my transition and I think this will make that search more challenging. This will present huge challenges for whoever the next leader is,” he said.

According to Boros, the $5 million reduction in the agency’s budget in fiscal 2017 would amount to a 12 percent cut based on the nearly $28 million budget recommended by both Baker and the Senate. That reduction would grow to 31 percent in fiscal years 2018 through 2021.

“Obviously, that is a significant cut to the ability of CHIA to deliver on the vision laid out in Chapter 224 for the agency,” Boros said. “This will be a significant change to our ability to collect health care data, make that data understandable for a variety of people and share that information with the public.”

Boros said that among the projects in the agency’s “work plan” for fiscal 2017 was to continue work with the Baker administration on the development of a website that would make information on health care costs and quality more readily available to the consumers.

Given the budget cuts that will have to be absorbed as a result of the Partners-Local 1199 deal and the fact that money hasn’t been committed to the project, he said the agency would be “less likely to pursue that work.”

Attorney General Maura Healey, who is traveling in Israel but has been engaged in the provider price variation issue, also took aim at the move, through a spokeswoman.

“We have concerns about the significant budget cut to CHIA and what that means for our ability to continue to make informed, data-driven health care policy,” Cyndi Roy Gonzalez, the spokeswoman, said in a statement. “We look forward to working with the Administration, legislative leaders and health care stakeholders to find a long-term solution to the price disparity problem.”

Among businesses that pay much of the cost of providing health insurance coverage to employees, some focused on the way the deal skirts underlying cost issues.

The deal could be “kicking the can down the road,” said Jon Hurst, president of the Retailers Association of Massachusetts. He urged lawmakers to find a “real resolution to the provider healthcare cost disparity problem” soon.

“The fact that the sponsors of the initiative are not going forward may indicate that costs and payment disparities were not the objective at all, rather further healthcare facility unionization,” Hurst said. “We must keep focused on the fact that costs cannot come down as long as we have a combination of excessive payrolls, and out of step reimbursement rates.”

Written by Matt Murphy