Massachusetts Health Officials Seek Authority to Control Costs

The decision by UMass Memorial Health to close the Leominster Hospital Maternity Ward has sparked a renewed call for increased authority for the Department of Public Health (DPH) in Massachusetts. Lawmakers argue that the DPH needs greater leverage to impact healthcare service closures, which they believe should be a more arduous process. Without legislative support, the DPH remains powerless to intervene effectively, as demonstrated when UMass Memorial Health proceeded with its closure in September 2023, despite local lawmakers’ requests for a delay.

The announcement of the closure came shortly after members of the Worcester legislative delegation, alongside representatives from North Central Massachusetts, voiced their objections to the decision. Unfortunately, these concerns were largely ignored, highlighting the limitations faced by both the DPH and the Health Policy Commission (HPC). The HPC, tasked with monitoring healthcare costs in the state, also operates under constraints that prevent it from enforcing its recommendations.

As an independent agency, the HPC can only suggest measures to control healthcare expenditures rather than impose binding regulations. This lack of enforcement power has contributed to ongoing challenges in managing healthcare costs. For instance, while the HPC has set a cost growth benchmark of 3.6% for 2026, actual healthcare expenditures have surged by 8.6% from 2022 to 2023, indicating a significant gap between recommended guidelines and real-world practices.

In a competitive market, pricing pressures drive healthcare costs higher. Hospitals and medical facilities often exceed the cost limits set by the HPC, while private sector industries seem to adhere more closely to expectations. Data from the Boston-Worcester-Providence area shows that compensation costs for private industry workers rose by only 3.3% during the same period, in stark contrast to the escalating healthcare costs.

Despite these challenges, health-care oversight officials are determined to persist in their cost-containment strategies. Last week, the HPC reiterated its commitment to the healthcare cost growth benchmark for 2026 and urged policymakers and healthcare leaders to convene for discussions on comprehensive reforms. During a recent hearing, testimony highlighted pressing affordability issues, difficulties in accessing care, and the looming threat of significant insurance coverage losses due to federal policy changes.

Critics, including Jon Hurst, President of the Retailers Association of Massachusetts, have pointed out that the benchmark established in 2012 has not effectively curbed rising costs. The HPC’s newly released cost trends report outlines four recurring themes for recommendations: addressing administrative complexity, controlling healthcare prices, managing pharmaceutical spending, and reducing low-value care, such as avoidable medical visits.

Lora Pellegrini, CEO of the Massachusetts Association of Health Plans, emphasized that the HPC has long identified the same factors driving healthcare spending growth. She stated, “The troubling reality is that, year after year, these cost drivers have gone largely unaddressed.” She noted that rising premiums and increasing patient barriers to care are direct consequences of the failure to act on longstanding data.

To tackle these issues, the HPC has called for Massachusetts to dramatically cut down on administrative complexities that hinder patient care. The commission also suggested that the state should focus on controlling excessive healthcare prices, learning from other states that have successfully moderated costs. Furthermore, with the rise in prescription drug spending, the HPC recommends that the state consider forthcoming guidance from the new Office of Pharmaceutical Policy and Analysis as well as the Division of Insurance.

The HPC has advocated for a reduction in low-value care and unnecessary emergency department visits while emphasizing the need for expanded access to behavioral health and primary care services. These recommendations align with ongoing efforts led by the HPC and the Executive Office of Health and Human Services.

Despite the HPC’s repeated calls for action, the reliance on recommendations without the power to enforce them raises concerns. As Pellegrini pointed out, “The time to act is now.” The imperative for strengthening the authority of the DPH and the HPC is clear, as their current recommendations lack the necessary enforcement mechanisms to produce meaningful change in Massachusetts’ healthcare landscape.