‘An arms race for more cancer beds': Dana-Farber's proposed hospital could increase health care spending, state report finds

Boston Globe

28-02-2025

Without adequate consumer protections, the new hospital 'may exacerbate ongoing affordability challenges in Massachusetts,' said David Seltz, executive director of the Health Policy Commission.
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Much of the report projected where patients would receive future cancer care, and how the price of services at different hospitals varied. For example, shifting inpatient cancer care to Dana-Farber's new hospital from the Brigham or even Beth Israel could result in less health care spending from commercial insurers, as Dana-Farber's prices are lower than those other facilities. If Beth Israel fills its vacated beds with patients who had been going to higher-priced facilities, that too would result in lower spending by commercial insurers.
But outpatient cancer care at Dana-Farber is more expensive than the average outpatient facility, so if Dana-Farber treats more patients who don't have to stay overnight, that could increase annual outpatient spending by private health insurers.
Between cost savings from inpatient care and increased spending on outpatient care, insurers could spend between $10.7 million to $17 million more annually on cancer care.
'For patients seeking cancer care in Massachusetts, this would be a significant realignment for cancer care among major health care providers,' Seltz said in a statement.
The report also
dug into spending increases that could result at other health care institutions beyond Dana-Farber and Beth Israel, showing the ripple effects of market changes. In addition to increased spending by private insurers at Dana-Farber, commercial spending could increase at Brigham and Women's, as the Brigham backfills beds vacated by patients who go to Dana-Farber. Those shifts could increase commercial spending by $4.2 million to $15.9 million, the report found.
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Medicare spending could also rise, both on the inpatient and outpatient side, the report said. Though Dana-Farber currently has lower inpatient Medicare rates compared to many other Boston hospitals, Dana-Farber has a somewhat unique reimbursement methodology, which includes an assessment of a hospital's costs. The hospital's reimbursements from Medicare may subsequently increase with the expense of running a new hospital. Moving outpatient Medicare patients to Dana-Farber could increase spending in excess of $10 million.
The new Health Policy Commission report
recommends that Dana-Farber pledge additional commitments, and that the state potentially monitor the health systems to address concerns, including around future price increases at Dana-Farber.
The preliminary
report will be a factor considered in an upcoming Public Health Council vote on the project scheduled for March, a key state approval.
The findings come amid an ongoing debate between Dana-Farber and Mass General Brigham, which have been battling before state regulators over the size, necessity, and impacts of the Dana-Farber project.
That debate began in 2023, when Dana-Farber announced its intentions to
end its longterm affiliation with Brigham and Women's and switch to Beth Israel. As part of the deal, Dana-Farber said it would construct a new 300-bed inpatient hospital on the campus of Beth Israel Deaconess Medical Center, jointly staffed with Beth Israel and largely overseen by Dana-Farber.
Dana-Farber has long held that the proposal would reduce health care spending. A required cost analysis conducted by a third-party vendor, done at Dana-Farber's expense, found that the project would not increase health care spending beyond the state's annual 3.6 percent benchmark.
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Mass General Brigham has pushed back against the need for more cancer beds, and suggested the project could increase health care spending. In its own analysis, MGB suggested only 30 percent of patients currently cared for at the Brigham might move to Dana-Farber. That would compel Dana-Farber to fill those beds with patients drawn from community hospitals, leading to higher health care spending.
In a joint statement, Dana-Farber, Beth Israel Deaconess Medical Center and Beth Israel's physician group, Harvard Medical Faculty Physicians, called the new state report 'thoughtful and robust.'
'Together, Dana-Farber Cancer Institute, Beth Israel Deaconess Medical Center and Harvard Medical Faculty Physicians have embarked on a journey to reimagine cancer care in our region, expand access to life-changing treatment and harness the power of scientific discovery,' the group said.
An MGB spokesperson did not immediately comment on the report Thursday.
Dana-Farber and Beth Israel have touted the deal as being a necessity for the region, one that will increase access to high-quality care and respond to future projected higher rates of cancer amid an aging population. Competitor Mass General Brigham has argued the proposed beds are not necessary and touted its own quality.
The Health Policy Commission's report said it was too early to evaluate Dana-Farber and Beth Israel's preliminary plans to improve quality.
As for the need for new beds, the report said that modeling based on demographic trends likely overstates future need for inpatient oncology care, while other factors like medical advancements may
decrease future inpatient need.
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'Our assessment is that we can't say with certainty that the expansion proposed by Dana-Farber is either necessary or that it is sufficient to ensure future access to inpatient care,' said Sasha Hayes-Rusnov, associate director for market oversight and monitoring at the Massachusetts Health Policy Commission, at a Thursday presentation.
Commissioner Dr. Alecia McGregor pointed out the dire need for maternity and behavioral health beds throughout the state, and worried the drive to build more cancer beds was based on business motivations rather than patient need.
'This appears like an arms race for more cancer beds, by some of the biggest players in the healthcare system,' she said. 'It pains me to think that hospital systems might be competing for these relatively generously reimbursed services at the expense of other needed services.'
Jessica Bartlett can be reached at