WITH THREE state-funded youth mental health programs at risk of closing, lawmakers and providers ramped up their opposition this week to Gov. Maura Healey’s proposed budget cuts that come as Massachusetts continues to grapple with a behavioral health care crisis.

Two 15-bed intensive residential treatment programs (IRTP), operated by NFI Massachusetts in Westborough, that serve teenagers with serious mental health and safety issues would close under Healey’s fiscal 2026 spending plan. That would leave just two other IRTPs in the state.

The governor’s budget would also shutter the state’s only clinically intensive residential treatment (CIRT) program, called Three Rivers in Belchertown, that has a dozen beds and treats children ages 6 to 12.

At a budget hearing Monday in Attleboro, Department of Mental Health Commissioner Brooke Doyle said those facilities are slated to close due to low patient counts, inadequate staffing and location hurdles. The cost-saving measure comes as DMH — which would receive a 7 percent overall budget increase under Healey’s proposal — looks to prioritize resources for its over-capacity psychiatric hospitals.

“These programs have been very difficult to maintain adequate and safe staffing within. They’ve been understaffed for extended periods of time, and that has contributed in large part to why we had difficulty keeping all the beds filled,” Doyle said in Attleboro. “The programs do provide a specialized service need, and the reality is, that we haven’t been able to operate them fully today. So what we’re proposing to do is to right-size the IRTP, reflecting the volume that does get utilized.”

Doyle said the state pays for those beds “in full,” regardless of whether or not they are occupied. She argued that makes it “not sustainable to continue to pay for 50 percent utilization.”

Doyle highlighted the state’s investment in community-based mental health resources, though the IRTP and CIRT programs are seen as a last resort to stabilize young patients who repeatedly end up in the hospital and pose significant safety risks to themselves and their family.

“Without these services, youth will continue to cycle through expensive and disruptive emergency and acute hospital services,” Lydia Todd, executive director of NFI Massachusetts, said at a State House budget hearing Tuesday, according to a copy of her prepared remarks. “Their families face income loss because it is impossible to maintain employment when they are regularly needed to respond to mental health crises.”

Todd added, “If this program is closed, the commonwealth will lose a recently renovated facility, a highly credentialed, experienced and skilled multi-disciplinary team of 95 staff, a Joint Commission-accredited program, and most importantly, the ability to help youth and families with the most serious needs to manage their mental health issues in their natural communities, and be less likely to end up in one of our adult systems.”

Todd told the News Service 95 out of 100 positions are filled. 

“We could be fully utilized — no problem,” she said. 

Program leaders and lawmakers contend the programs are underutilized due to a complicated DMH referral process that can leave youth languishing in hospitals for weeks or months before they secure placement. Due to high staff turnover during the COVID pandemic, some hospital mental health providers also were unaware the IRTP and CIRT programs existed, said Sen. Jake Oliveira of Ludlow. 

“It’s my hope that we can restore the funding for these critical programs because everything that we hear from constituents and everything that we read, there is a dire need for youth beds, particularly adolescent mental health beds throughout Massachusetts,” Oliveira told the News Service. “If we have programs that are underutilized, then DMH needs to do a better job with the referral process to get help to families across Massachusetts.”

Doyle admitted the referral process was “too clunky” at the hearing Monday.

“So I’ve actually made some changes to that referral process, going to preview it with stakeholders this month, with a go-live plan for May,” Doyle said.

In another major budget cut, DMH plans to slash the case management workforce in half, which would save the state $12.4 million. That move recently triggered DMH workers represented by SEIU Local 509 to take a vote of no confidence in Doyle. 

Gov. Maura Healey has already hit pause on a controversial plan to shutter a 16-bed psychiatric hospital in Cape Cod. That closure, combined with the three youth mental health programs, would have saved the state a total of $20.1 million, according to a presentation from the Executive Office of Health and Human Services.

As House Democrats prepare to release their budget next week, Rep. Aaron Saunders of Belchertown said he plans to fight to ensure the CIRT, operated by Cutchins Programs for Children & Families, receives funding.

“We need it to be there,” Saunders told the News Service. “It is a level of intervention and service that other programs are not designed to provide, and that to me really is the linchpin.”

Saunders added, “In my conversations with the administration, I’ve tried to impress upon them that there needs to be access, in some way, shape or form, to this level of service.”

Tina Champagne, CEO of Cutchins Programs for Children & Families, urged lawmakers Tuesday to “dig deeper and to save our programs.” In prepared remarks, Champagne said the state remains in the throes of a “children’s mental health crisis” and argued “this is no time for a reduction in intensive mental health services in our state.”

“The decision to cut the CIRT is not only in direct opposition to well-established evidence-based practices for children and families with some of the most persistent and challenging mental health and safety concerns, but also puts the the most vulnerable children and families in the commonwealth at even greater risk by perpetuating the cycle of ACES and traumatic experiences,” Champagne said, referring to adverse childhood experiences.

She added, “The degree of safety and mental health challenges that must occur for youth to be considered for a DMH referral for the CIRT is highly intensive and the youth’s safety concerns are typically quite serious. If these youth could be treated elsewhere in the community, they would have been referred to those services, and usually have already utilized these services, but they are not intensive enough to maintain safety and mental health stabilization.”

At the hearing, Oliveira told Doyle he was insulted by her remarks that signaled the Belchertown program was not viable due to its location in western Massachusetts.

“That’s insulting to any western Mass. lawmaker who might be sending people halfway across the state, hours away to get the programs to utilize them,” Oliveira said.

The commissioner told Oliveira she regretted if her testimony seemed to be “disrespectful.”

“It’s more of a matter that we have to weigh parents’ requests and parents’ priorities, as well,” Doyle said. “So, it has always been a western Mass.-located program. It’s not new. And what we’re seeing is that it is getting a bit more challenging, particularly with workforce constraints, that when we don’t have full staff operating, it requires that the department have to make decisions with parents about whether or not their their child can be safely treated in that environment, based on staff that are available at that time.”

Rep. Kelly Pease, a Westfield Republican, questioned whether the adolescent mental health programs represented the “smart place” for DMH to make cuts. Without providing sufficient care to young Bay Staters early on, the state may exacerbate the prison pipeline and end up incurring more costs in the future, Pease told Health and Human Services Secretary Kate Walsh.

Walsh insisted those programs were 50 percent occupied and emphasized EOHHS’s push to “right-size our behavioral health infrastructure.” Pease argued the low patient census was a function of DMH’s “antiquated process to get a referral.”

“I think the question for the Legislature is: Do you want to pay for standby capacity in two or three programs across the state that may or may not be used?” Walsh said at the hearing Monday. “In the meantime, you should challenge us to significantly improve our antiquated or very complicated processes to get people into these systems — some of which, I will remind us, were the result of court decisions. So we have patient referral pathways for people with, for children with behavioral health challenges that were built by lawyers, with due respect.”

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AT A TIME when lawmakers are wrestling with cost, access and regulatory questions, health care industry power players continued to dominate the Beacon Hill lobbying world last year, spending the most on employing influential insiders who sway development of public policy.

The Massachusetts Association of Health Plans spent $1.3 million on lobbyists in 2024, more than any other individual client in the Bay State, according to data from Secretary of State William Galvin’s office. The organization representing insurers newly supplanted the Massachusetts Health and Hospital Association, which topped lobbying spending in 2022 and 2023 but ranked second last year with $1.1 million.

Those organizations were the only two clients that spent more than $1 million apiece on lobbying last year.

Many health care- and pharmaceutical-adjacent groups ranked near the top in 2024 lobbying spending, too, including the Massachusetts Biotechnology Council ($866,139), Massachusetts Nurses Association ($519,191), Blue Cross Blue Shield of Massachusetts ($460,403) and the Association for Behavioral Healthcare ($459,070).

Health care policy is one of the thorniest and most complex topics for lawmakers to tackle. The Legislature enacted a pair of major reform bills in 2024, including one intended to lower prescription drug costs and another imposing more financial oversight on hospitals following the collapse of Steward Health Care.

But the problems plaguing both providers and patients remain potent. Sen. Cindy Friedman, the Senate’s point person on health care reforms, warned last week that the health care system is “falling apart.”

The total amount paid to lobbyists by all clients across different topics crossed into nine figures in 2024, climbing to $104.1 million.

The same top lobbying shops continue to command the most money from clients.

Each of the five top-earning firms in 2023 retained the same ranking in 2024, led by Smith, Costello and Crawford, which hauled in $6.2 million last year.

Like many lobbying entities around Beacon Hill, Smith, Costello and Crawford counts well-connected former public officials among its ranks. The firm is partly led by former Democrat Reps. Michael Costello, and another former representative, Carlo Basile, is a senior policy advisor. That’s the same title held by Marylou Sudders, who served as health and human services secretary under Gov. Charlie Baker.

Smith, Costello and Crawford’s top-paying client — $180,000 last year — was energy giant Avangrid, a key figure in the state’s push to build out cleaner energy sources including offshore wind.

Tremont Strategies Group earned the second-most of any lobbying firm with about $4.5 million. Former Congressman Chet Atkins, who also served in the Massachusetts House and Senate, is a partner at Tremont.

Rounding out the five top-earning firms were O’Neill and Partners ($4.28 million), Dempsey Associates ($3.77 million) and Kearney, Donovan and McGee ($3.5 million).

The next five ranking spots were all captured by the same firms as 2023, but in a slightly different order. ML Strategies jumped from seventh-most in earnings in 2023 to sixth-most in 2024, flipping with Bay State Strategies Group. Similarly, Issues Management Group climbed from ninth in 2023 to eighth in 2024, swapping places with TSK Associates. The Suffolk Group landed in 10th both years, earning about $2.26 million in 2024.

No individual lobbyist earned more in 2024 than former Senate President Robert Travaglini, who founded what is now known as TSK Associates after leaving the Legislature.

Travaglini hauled in $854,000 from his lobbying clients in 2024, according to data from Galvin’s office. Basile, who was the top earner in 2023, landed in second last year with $830,000 in lobbying salary.

The private sector can be much more lucrative for lawmakers than remaining in the Legislature. The current Senate president, Karen Spilka, earned $203,286 in total pay last year, according to state payroll records, less than one-quarter as much as Travaglini brought in from lobbying clients.

Fourteen lobbyists earned more than half a million dollars from their firms last year, and 56 brought in at least $250,000.

Three other registered lobbyists were paid at least $250,000 directly by clients: Mass. Association of Health Plans President Lora Pellegrini ($469,233 from MAHP), Clark University Vice President for Government and Community Affairs Joseph Corazzini (nearly $235,000 from the Trustees of Clark University), and OpenCape CEO Steven Johnston ($246,159 from OpenCapeCorporation).

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ELIGIBLE MASSHEALTH members and Health Safety Net patients will have access to prenatal vitamins and over-the-counter birth control at no cost, under two standing orders that the Healey administration announced Thursday.

The orders, which essentially enable the state to write a prescription for a large group of people, will allow about half a million patients to access the reproductive health medications.

The medications will be available at all MassHealth-enrolled pharmacies, and available for eligible MassHealth members and those who use the Health Safety Net, a fund used to pay care costs for certain low-income and uninsured individuals.

MassHealth currently covers 40 percent of all births in Massachusetts, according to the Healey administration.

“Removing barriers like this is one of the simplest ways we can work toward better health outcomes for mothers and infants in our state,” Health and Human Services Secretary Kate Walsh said.

The standing order covers a 90-day supply of over-the-counter prenatal vitamins or multivitamins containing at least 400 mcg of folic acid, a B vitamin that helps bodies create new cells. Doctors recommend that people considering getting pregnant, pregnant, or nursing, take these vitamins.

Pharmacists will be required to counsel patients on the use of prenatal vitamins, including when to start and stop taking them, and encourage follow-up with a primary care provider and obstetrician/gynecologist.

The second standing order covers oral hormonal contraceptives. It allows pharmacists to give out a 365-day supply of over-the-counter birth control pills — specifically norgestrel 0.075 mg tablets — to eligible MassHealth members and HSN patients.

It specifies that birth control is “accessible to individuals of reproductive potential and age,” according to Healey’s Executive Office of Health and Human Services (EOHHS).

“As part of this initiative, pharmacists will be required to counsel patients on contraindications, side effects, and the proper use of the birth control pill, emphasizing the importance of daily adherence and informing patients that the pill does not protect against sexually transmitted infections,” information from EOHHS says.

“We know that prenatal vitamins and birth control play an essential role in women’s health. No one should be prevented from getting the care they need because of cost or because they are waiting for a prescription,” Healey said in a statement. “These standing orders will make it easier and more affordable for people to make the best health care decisions for themselves, will improve health outcomes for women and babies, and will reduce health disparities.”

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WE GET IT: no one wants to imagine their local hospital struggling, much less the entire healthcare sector that is there for us during our most vulnerable moments and has propped up Massachusetts’ global leadership for decades. It’s unthinkable.

But the most difficult realities are oftentimes the most important to accept. Now is one such time, as the state’s healthcare system buckles under the weight of unsustainable cost pressures and is showing once unimaginable signs of peril.

Ask any local healthcare leader or caregiver, and they will tell you that our system is in a vastly different place than it was just a few short years ago. Patients are older, sicker, and in need of longer stays. Workforce and capacity constraints have reached a boiling point. And time-insensitive administrative roadblocks are fueling wait times and backups.

All of these factors are intertwining to create a crisis that is slowly destroying care delivery for providers and their patients. Yet, despite its magnitude, it is still not fully understood outside of those who are struggling to keep hospitals afloat each day, 24/7, 365. Even worse, it has given oxygen to crisis-deniers who are more interested in finger-pointing than collaboration.

Solutions start with acceptance. Given the stakes, it is imperative that everyone involved in healthcare – from insurers to business partners to policymakers – recognize the new reality of hospital finances, move past out-of-touch arguments that thrive off blame, and help us restore a basic sense of stability to the Commonwealth’s most essential sector. There is simply no other option but for all of us to be working from the same set of facts if we want to control costs and keep patient services off the chopping block.

It starts with accepting these three things:

Hospitals are falling deeper into the red. The state’s new data paints a sobering picture: the median operating margin among hospitals across the state dipped to negative 0.9 percent in June. This telltale metric for hospital performance is moving in the wrong direction; March’s negative 0.1 percent margin was already cause for alarm. Even those who have occasionally managed to eke out a small margin are far weaker than they were before the pandemic.

There are real-life consequences behind these numbers. Healthcare organizations are increasingly finding themselves in the middle of decisions regarding cutbacks, layoffs, and the balance between basic survival and investment in the future.

It has become impossibly expensive to operate a hospital. Provider organizations have been shouting from the rooftops about how their financial burdens are coming from every angle and affecting access and costs.

Labor expenses account for at least 60 percent of hospitals’ overall costs, and they have risen sharply in recent years in the wake of 15,000-plus job vacancies. Organizations have spent more than $3 billion on temporary workers since 2019 in order to fill the gaps and keep care beds open. Putting the stability of patients and communities ahead of their own is why Massachusetts ranked first in the country for preventable loss of life throughout the pandemic, but the bill for that effort has come due.

Additionally, nearly 2,000 patients are stuck in hospitals because they cannot be placed in the next level of care they need (such as a nursing home or rehab facility). Massachusetts hospitals are now spending more than $400 million each year to provide these individuals with the extra, unpaid care they need. What’s more, the unnecessary administrative burdens behind many of these backups – including excessive prior authorization requirements – are resulting in $1.75 billion in cost waste to the system each year. 

Because our system is designed to pay hospitals based on volume, not how long patients stay, the growing trend of sicker patients has impacted bottom lines. And unlike other sectors, providers cannot simply pass off skyrocketing supply and inflationary costs to consumers.

One recent CommonWealth Beacon op-ed inquired “how exactly hospitals are burning through so much cash.” To anyone willing to look beyond their own self-interest, these factors speak for themselves – and they have only worsened in the midst of Steward Health Care’s downfall.

Hospitals’ financial demands are only growing. The Health Safety Net, which funds care for uninsured patients in Massachusetts, is projected to face a deficit of up to $400 million between this year and next. These are deficits not seen since the Commonwealth’s passage of universal healthcare in 2006. 

Hospitals are on their own in picking up the tab for the historic shortfalls, without contributions from insurers, state government, or other elements of the healthcare ecosystem. The reasons behind this trend are multifold: a rising volume of uninsured patients, increasing state withdrawals from the fund, and the financial instability of Steward’s former hospitals all play a role.

Add nearly $100 million in MassHealth rate cuts to the mix, as well as the pharmaceutical industry’s threats to the 340B drug pricing program, and it is easy to see how things have gotten so bad so fast.

Massachusetts hospitals have helped retain our status as the nation’s number one healthcare system for access and affordability, but it is coming at a steep and unsustainable cost. As one of the largest purchasers of employee health insurance, they also acutely feel the pains of rising expenses from the operating table to the kitchen table.

We collectively as a Commonwealth have simply not done enough to lift our providers out of economic peril. The cost of inaction is now plain to see for every patient and insurance purchaser. There are plenty of forums to discuss solutions, whether they surround workforce reforms, administrative simplification, or transformation of care delivery so Massachusetts can continue to lead on quality, access, and affordability.

But for today, our immediate ask is so much simpler. Hospitals and their caregivers merely want their mounting challenges to be understood. They want to know that others in the healthcare space are working with the same sense of urgency (and at the very least not using their voice to chip away further). But whether others are willing to help or not, hospitals will, above all else, defend the daily wellbeing of their patients and workers at a time of serious uncertainty.

Steve Walsh is president and CEO of the Massachusetts Health & Hospital Association. MHA serves as the unified voice for the commonwealth’s hospitals, health systems, and healthcare providers.

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HEALTH CARE SPENDING in Massachusetts continued to grow faster than household incomes, according to new research, fueling concerns about access to care even before accounting for more recent upheaval inflicted by Steward Health Care’s bankruptcy.

The latest annual health care cost trends report from the Health Policy Commission found that total health care expenditures per capita climbed to $10,264 in 2022, the first time it crossed into five figures and a 5.8 percent increase over 2021.  

Total spending on health care in Massachusetts raced past $70 billion, bounding from $67.8 billion in 2021 to $71.7 billion in 2022, the HPC said.

That’s the second-highest year-over-year growth rate since the creation of the HPC a decade ago, lagging only the period from 2020 to 2021, which experts described as an outlier because of a “rebound” in spending after the start of the COVID-19 pandemic.

“Across all categories of care, the dominant factor driving this growth was higher prices, not more care being provided,” the HPC said alongside its report published Thursday.

Beneath the topline trend, analysts cited a range of data points that show growing strain on Bay State families.

Massachusetts has the second-highest family health insurance premiums in the country, and the average annual cost of health care for a family is more than $29,000 when including out-of-pocket spending, the HPC said. The number of privately insured Bay Staters who did not receive needed health care due to costs increased 50 percent in two years, from 600,000 in 2021 to 900,000 in 2023. Businesses are struggling with costs, too, and are turning to high-deductible plans to limit premium increases, according to regulators.

“Addressing health care affordability in a meaningful way will be necessary to meet the Healey-Driscoll administration’s goal of making the Commonwealth more economically competitive for families and businesses to stay and thrive,” the HPC wrote. “These challenges require bold action to move the health care system from the status quo to a new, more affordable, sustainable, and equitable trajectory.”

Much of the growth in health care spending was driven by higher prices on the commercial side. Commercial health care spending per insurance member increased 5.2 percent in Massachusetts from 2019 to 2022, a higher rate than the national average in the same span or the concurrent change in the state’s median family income, the HPC said.

Experts also pointed to pharmacy spending as an area fueling the broader trend. From 2017 to 2019, pharmacy spending per enrollee grew by 0.7 percent per year; in the following three-year period from 2019 to 2022, it shot up 8.2 percent per year, according to the HPC.

“Pharmacy spending trends have been one of the greatest drivers of health care spending in recent years in Massachusetts,” said HPC Executive Director David Seltz. “Given what we’ve seen with uptake of some of these new blockbuster drugs, as well as the entry of very high cost new drug therapies [and] gene therapies, I think we can expect to see that that trend will continue.”

Regulators dedicated new attention in the latest report to the collapse of Steward Health Care, even though the most recent cost trends data through 2022 do not capture the system’s bankruptcy that unfolded this year.

Instead of renewing many of the recommendations from last year’s report — which lawmakers so far have not adopted — the HPC this time around focused its suggestions on protecting the state from a repeat of the Steward crisis.

Regulators called for lawmakers to expand oversight tools, especially by subjecting more transactions to review by the HPC; strengthen transparency requirements that Steward allegedly flouted; better protect communities historically underserved by health care; and tackle pressure points like inequities in provider prices.

“Together, this is a very strong package of reforms that, if passed and implemented, would be an incredibly bold step forward that would put us as a Commonwealth in a much stronger position to be able to protect our system and to plan for a better system moving forward,” Seltz said.

Contributing to the long-running debate over more or less government regulation, HPC leaders for years have been asking lawmakers to grant them more regulatory muscle to expand their reviews and more forcefully turn the tide on cost growth.

The House and Senate each approved major health care oversight reform legislation this year, but top Democrats have so far been unable to forge a compromise bill featuring protections that lawmakers said would prevent another Steward crisis from happening.

One question Thursday from a commissioner, MetroWest Health Foundation President Martin Cohen, touched off a polite disagreement between Seltz and the Healey administration’s health care chief.

Reflecting upon the Steward-inspired recommendations, Cohen asked what kinds of systems other states have in place. “I don’t get the feeling that we’re at the forefront here,” he said.

“As I look through this list, I can think of at least a few states on each one of these that have gone further than Massachusetts,” Seltz replied. “I think it is a fair assessment to say we are no longer a leader in many of these topics.”

Health and Human Services Secretary Kate Walsh disagreed.

“I think people have elements of it, but not the whole part,” Walsh said. “They might be stronger on physician practices — I think of California in that way. My read … is that people were looking to how Massachusetts is doing this, even in light of the Steward challenges, which other states are dealing with as well. So I think we’re kind of ahead.”

A landmark 2012 cost containment law set a “benchmark” target for how much health care spending should grow each year in Massachusetts, and created the HPC to monitor many of the state’s health care dynamics.

While there were year-to-year fluctuations, cost growth kept closer to the state-set goal at the outset. Average spending grew 3.4 percent per year from 2012 to 2017, a shade below the 3.6 percent benchmark.

But from 2017 to 2022, the average annual growth climbed to 4 percent, surpassing targets in that span — and the latest data show the second-highest annual increase to date.

Other reports from state agencies and watchdogs have also warned recently about increasing pressure in the health care sector. More than four in 10 non-Steward hospitals reported negative operating margins through a significant portion of the fiscal year.

“This is a time of seismic change for Massachusetts healthcare, and — as data from [the Center for Health Information and Analysis] and HPC has made resoundingly clear — our patients and providers are the ones feeling the biggest aftershocks,” Mass. Health and Hospital Association President Steve Walsh said Thursday. “We look forward to testifying at the HPC hearing next month about how these enormous pressures, which extend far beyond the Steward crisis, are impacting every corner of care delivery in the commonwealth.”

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“WHAT HAPPENS TO a dream deferred?” asks Langston Hughes in his timeless poem, Harlem. “Does it dry up like a raisin in the sun; or fester like a sore and then run? Does it stink like rotten meat? Or crust and sugar over—like a sugary sweet. Maybe it just sags like a heavy load. Or does it explode?”

Thousands of frontline workers, patients, and advocates had their dreams dashed, economic security threatened, and their plans for the future interrupted with the closure of Carney Hospital and Nashoba Valley Medical Center on August 31. Now residents wait in bewilderment to see what happens next.

There are a few ways this could go.

Unfortunately, what happens to a closed hospital depends on who made up its patient pool—i.e., the racial makeup and wealth of the surrounding community. And here is where structural racism comes into play.

The Sheps Center for Rural Healthcare Research at UNC Chapel Hill found that for rural counties that lost hospital care, closed hospitals in Black communities were more likely to remain abandoned or get turned into condos, apartments, or shopping malls, while in White neighborhoods, they were more likely to be converted to a new healthcare purpose.

Indeed, several examples of abandoned hospitals—festering like open sores—in Black communities exist in urban areas across the country.

In Trenton, New Jersey, the site of shuttered Mercer Hospital on Bellevue Avenue has been abandoned since 2011. In New Orleans, the over 2,000 bed Charity Hospital has sat empty since 2005, closing under dubious circumstances after Hurricane Katrina. Almost 20 years after its closure, it is slated to reopen as an “academic and research hub,” and student space for Tulane University in 2027. In Southeast Washington, DC, DC General Hospital closed in 2001, and was used as a shelter for homeless families until the shelter’s closure and demolition in 2018.

Alternatively, some communities are able to maintain health services at abandoned sites, albeit mostly outpatient, non-acute care. One common formula for repurposing the site of former hospitals is to establish a freestanding emergency department, and set up a few relatively profitable outpatient services, such as urgent care, dialysis centers, diagnostic imaging, and ambulatory surgical centers. 

A decade ago in New Jersey, after a flurry of closures in the Garden State, Community Healthcare Associates—a private company specializing in creating medical arts complexes—developed a model for this. These “medical malls” were erected, perhaps opportunistically, in the wreckage of the former acute care hospital sites in what were relatively disinvested postindustrial neighborhoods. However, questions remain as to whether these services meet the specific needs of these communities, and are even accessible to under-insured, low-wealth patients.

Repurposing Steward’s recently closed sites for the continued provision of healthcare would be a relatively positive outcome. But this depends on how the sites are redeveloped. And advocates are keeping close watch on how this redevelopment takes place.

At present, Nashoba Valley’s Emergency Department may potentially be converted to an urgent care center, and the medical equipment at Nashoba and Carney is being auctioned off to the highest bidder.

Although closure and reopening is a traumatic, jarring, and harmful experience for workers and communities, permanently closing the hospital would leave a lasting scar and impose harm for generations. Therefore, the Carney site should be revamped and reopened as a full-service hospital of the highest quality. 

There is precedent for reopening closed hospitals and restoring discontinued service lines. Inpatient care at North Adams Regional Hospital reopened—after a decade of being closed—and this time qualifying for Critical Access Hospital designation.

And in Santa Clara, California, the county is purchasing a hospital from HCA Healthcare for $175 million to reestablish high-level trauma care in a San Jose hospital after HCA made critical service line cuts (i.e., eliminating heart attack and stroke care) in the name of finances. Local and state policymakers need to lean in, remember their stated commitment to equity, and reimagine new possibilities.

Why is the realization of this dream of equitable healthcare in Boston so urgent? Because the epidemiological landscape demands it. We should not be able to sleep while the infant mortality rate in Hyde Park stands at 7.8 deaths per 1,000 live births (the highest of any neighborhood in the city) while nearby Roslindale has the lowest infant mortality rate (2.4/1,000) in the city. The median incomes across these neighborhoods aren’t terribly different, but the racial composition is. Under these circumstances, we should not allow the few healthcare services that service communities of color to exit without a trace.

I implore state officials to make every effort to rebuild and improve health care in Dorchester. In addition to inpatient beds, the area desperately needs an emergency department, behavioral health services, and maternal and child health services. If a child in anaphylactic shock can’t receive nearby treatment, a family member having a stroke can’t receive life-saving care, or a pre-eclamptic pregnant person can’t receive an emergency Cesarean, then what exactly is the point of having a world class health care system in your backyard?

Rather than slashing healthcare facilities, let’s augment what we already have for all communities. This moment in healthcare is a critical juncture, where all options are on the table.

Our dreams and our children’s dreams depend on it.

Alecia J. McGregor is a faculty member in the Department of Health Policy and Management at the Harvard T.H. Chan School of Public Health. She resides in Hyde Park. All views expressed here are her own and not representative of any institution with which she is affiliated.

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SET TO ACQUIRE two hospitals owned by bankrupt Steward Health Care, Lawrence General Hospital’s president, Abha Agrawal, has a vision for a large, regional health care system in the Merrimack Valley.

The purchase of the two Holy Family hospitals in Methuen and Haverhill by Lawrence General – a safety net hospital – is slated to take place by Tuesday. Lawrence General will pay $28 million to buy the properties and the state will contribute money to support the hospitals’ operations. The state is expected to provide more than $489 million over three years to help all of the new owners of Steward’s hospitals.

“Most people wanted to believe in the vision – that if we can create the system of scale and stability, and hopefully not just more of the same thing,” Agrawal said on a Health or Consequences episode of The Codcast with Paul Hattis of the Lown Institute and John McDonough of Harvard’s Chan School of Public Health. “Now we have this community-based system that we can scale.”

The vision includes culturally competent care to a diverse, multi-ethnic community that Agrawal hopes to serve effectively for many years to come. Supported by innovations in payment approaches that are not strictly volume-related, Agrawal also hopes to be able to transform regional health care delivery through use of AI and other technologies. She did not go into detail on the changes.

Most importantly, she wants the hospital system to prioritize patient safety. Under Steward, there have been reports of patients not receiving appropriate care due to a lack of equipment or staffing. 

“Our team has very clear guiding principles [and] our first [one] is: protect the patient,” said Agrawal. “The second is: protect the team [and] give them what they need in order to execute on the first principle, to protect the patient.” 

Agrawal said that she felt strongly about acquiring the two hospitals even though it seemed like an “audacious and impossible” idea. Agrawal said the close proximity of both hospitals to Lawrence General and the impact that the closure of either facility would have on her hospital factored into the decision to buy the Holy Family hospital campuses.

“It’s happening so much in our backyard and it is going to impact us,” said Agrawal. “So just watching it and say, ‘well, it’s not my problem, it’s Steward’s problem,’ was absolutely not an option from every perspective. If there was an abrupt reduction or discontinuation of services, there [would] be tremendous challenges in access to care and…we [would] have significant overcrowding and adverse impact to us as well.” 

However, there are challenges ahead for Lawrence General if the transfer goes through. The hospital has faced its own financial issues over the last few years and Agrawal said that there was some concern that a struggling Lawrence General would have a hard time taking on two more hospitals that are in dire financial circumstances.

“Everyone from my own team to our board to state officials wanted to know: if you can’t make – not me personally – one hospital work, how would you make more than one hospital work?” said Agrawal. “And are we multiplying the problem or are we creating a new vision and a new solution.”

But Agrawal said Lawrence General is beginning to turn around under her leadership. The hospital has in the past needed money from the state to balance its books – two years ago the state provided $35 million and last year it was $30 million. This year, however, Agrawal expects the hospital won’t need any supplemental payments from the state.

Agrawal is optimistic Lawrence General will be able to turn the Steward hospitals into functional community-focused hospitals. She said there is a lot of work to be done to make up for the severe underinvestment the hospitals experienced under Steward. She said resources will be needed to fix issues with the facilities and equip them properly. She also expressed concern that there would have to be a lot of work to repair the breach of trust between the Steward hospitals and their stakeholders, including patients, physicians, the community, and even local hospital vendors, some of whom have not been paid over the last few years.

“The breach is palpable,” said Agrawal. “So what I would like to do…is start to repair the breach between a health care delivery institution and the patients and the communities and families. So we can create the system that we really set out to create.” 

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PROVIDING STEWARD HEALTH’S successor hospitals with up to $700 million in state tax revenues because of abysmal management by its private equity owners has left many Massachusetts taxpayers upset.  That outrage should result in a detailed accounting and annual public reporting of all hospitals’ finances across the state to prevent a reoccurrence. 

The reality is that taxpayers have been propping up hospitals for years, yet quality has not improved, costs have gone up, and access has gone down.  Policymakers cannot keep providing state resources to these hospitals without additional accountability or oversight.

Lawmakers’ reluctance to upset the status quo may stem from the fact that healthcare is big business in Massachusetts. The largest employer in Massachusetts, by far, is Mass General Brigham, followed by Beth Israel Lahey Health. Together they employ almost 125,000 people. That’s nearly 20 percent of the population of Boston. When you factor in Tufts Medical Center, Boston Medical, Boston Children’s, and the others, it is clear how much economic power the hospital industry has in Massachusetts.

Much of the hospital sector growth has come at the expense of other industries and other public priorities. New scholarly research concludes that “Over the past two decades, hospital prices have outpaced the price growth in all other sectors of the US economy.” 

Over the past 30 years, hospital prices have increased by 600 percent, which has driven up the overall cost of healthcare.  The American Medical Association found that the largest share of healthcare spending – over 30 percent – goes to hospitals.  These unfettered price increases lead to higher insurance premiums, less take-home pay, and reduced profit margins for businesses.  It also means fewer state resources to fix our transportation infrastructure or invest in public health.

Taxpayers support non-profit hospitals by granting them tax-exempt status. As a result, most Massachusetts hospitals don’t pay income taxes but must provide community benefits, such as free care, in an amount commensurate with the tax benefit they enjoy.  They are reimbursed for unpaid care through the Health Safety Net fund, supported by $165 million in annual fees from hospitals and insurance companies, which are ultimately paid by consumers through higher hospital charges and insurance premiums. This current practice needs to be reexamined to prevent an undue burden on taxpayers. 

Despite this taxpayer largesse, the Massachusetts Health and Hospital Association reports a $220 million Healthy Safety Net deficit for fiscal year 2025, following $380 million deficits in FY 2023 and 2024, totaling $600 million.  It raises the question how exactly are hospitals burning through so much cash?

Before lawmakers provide additional resources to these hospitals, it would be in taxpayers’ best interest to learn how health systems are spending this money.  Knowing what is behind the Health Safety Net deficit is a critical step in addressing the shortage.  The answer cannot simply be to keep giving hospitals more money because employers, both fully- and self-insured, are paying for these costs indirectly through higher charges and premiums.

Notably, hospitals are still asking for more revenue.  They are increasingly using aggressive negotiating tactics to obtain higher payments from insurers and customers.  Some hospitals have threatened to leave insurers’ networks, then leverage the media to scare patients that they’re about to lose access to their doctors and providers to apply pressure to commercial payers.  This results in higher rates that are passed on to employers in the form of higher premiums and to their employees in the form of higher out-of-pocket costs or less take-home pay.

The economic impact of higher hospital costs is real.  Research from the University of Chicago shows that “a 10 percent increase in health insurance premiums reduces the aggregate probability of being employed by 1.2 percent, reduces hours worked by 2.4 percent, and increases the likelihood that a worker is employed only part time by 1.9 percent. For workers covered by employer-provided health insurance, this increase in premiums results in an offsetting decrease in wages of 2.3 percent.”

Just because many hospitals are tax-exempt, it does not exempt them from answering questions about their rising prices, business practices, and the Health

Safety Net shortfall.  In fact, increased accountability is the price they should pay for sizable state subsidies.

The Employer Coalition on Health is trying to do just that.  A group of concerned employers who are working to make healthcare more affordable, we will be asking for a full accounting of how Health Safety Net funds have been spent and if the tax-exempt status that hospitals enjoy in return for providing community benefits is in keeping with that tax benefit as necessary to ensure that the commercially-insured are not paying more than their fair share.

Eileen McAnneny is president and CEO of Employer Coalition on Health, which advocates for employers in conversations surrounding healthcare affordability in the Commonwealth. 

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Massachusetts has officially exercised its eminent domain powers to seize St. Elizabeth’s Medical Center in Brighton, Gov. Maura Healey’s office said Friday, days before Steward Health Care’s hospitals are poised to transfer to new operators.

Healey in mid-August announced her plan to take St. Elizabeth’s through eminent domain, knocking Steward’s landlord and lenders at the time for failing to agree to a deal that would allow the hospital to stay open. The seizure ultimately allows Boston Medical Center to take over operations at St. Elizabeth’s.

The governor’s office said that as part of the legal process to take the hospital, Healey declared that if St. Elizabeth’s were to close, “it would create a public health emergency due to the large volume of patients currently served by the hospital and the resulting disruption to the delivery of medical services in the region.” But a key Steward lender signaled Friday afternoon it would fight Healey’s “unconstitutional use of eminent domain.”

“While Apollo continues to put its greed ahead of the health and wellbeing of the people of Massachusetts, we are taking action to make sure St. Elizabeth’s remains open,” Healey said in a statement Friday morning. “By transferring operations to Boston Medical Center, we will protect access to care for tens of thousands of patients and save thousands of jobs. Our administration is committed to ensuring smooth transitions at the five Steward hospitals that we were able to save, and supporting the communities impacted by Steward’s closure of Nashoba Valley Medical Center and Carney Hospital.”

Apollo Global Management, asked whether the company plans to challenge Healey’s land taking, provided a statement from attorney Bill Reid of Reid Collins & Tsai LLP. 

“Despite our repeated attempts to engage in reasonable negotiations, the Governor has initiated an unconstitutional use of eminent domain at the expense of Apollo’s third-party investors,” Reid said. “Taking the property for a fraction of the assessed value is theft and everyone in Massachusetts–every business owner and homeowner–should be concerned about this threat. As a fiduciary, Apollo is left with no choice but to continue pursuing litigation aimed at challenging the Governor’s unconstitutional use of eminent domain.”

Unlike with St. Elizabeth’s, the administration did not intervene to halt the closure of Carney in Dorchester and Nashoba in Ayer, which Healey attributed to the hospitals not receiving qualified bidders.

Healey’s office described St. Elizabeth’s as a “crucial provider” for underserved communities.

“Its closure would put vulnerable patients at risk who would no longer have access to emergency services, maternity care, behavioral health services and inpatient care,” Healey’s office said. “Further, inpatient capacity in the Boston area remains at record highs, and the more than 60 patients currently at St. Elizabeth’s would not have immediate access to health care.”

In the first step toward the eminent domain land taking, the state on Aug. 16 offered Steward’s landlord and lenders $4.5 million “to purchase the fee and any other necessary property interests in St. Elizabeth’s Medical Center.”

The governor called that amount the “appropriate and fair market value of that property.” Boston assessor’s office lists the assessed land value at 736 Cambridge St., where St. Elizabeth’s is located, at just under $51 million.

Under state law, the governor has the authority to take property by eminent domain. The law says the governor “having first complied with all the preliminary requirements prescribed by law, may adopt an order of taking, which shall contain a description of the land taken sufficiently accurate for identification, and shall state the interest therein taken and the purpose for which such property is taken, and in case such taking is for an improvement for which betterments may be assessed shall state whether betterments are to be assessed therefor.”

The firms controlling St. Elizabeth’s real estate rejected the Healey administration’s offer, saying it “significantly undervalues the real property underlying St. Elizabeth’s.”

“Accordingly, should the Commonwealth move forward with its proposed plan to exercise eminent domain and compensate ACREFI only $4.5 million for the property, ACREFI will have no choice but to exercise its constitutional and statutory rights and take any and all actions necessary to protect the interests of the investors to which it has fiduciary obligations,” an Aug. 20 letter from the lender said. “ACREFI believes there are numerous procedural and constitutional issues raised by the Commonwealth’s proposed plan and conduct to date that it will vigorously challenge.”

A Healey spokesperson did not answer a News Service question about the cost of the taking but said the payment isn’t due yet.

All of Steward’s remaining Massachusetts hospitals are expected to be sold to their new operators on Monday.

State health regulators this week approved emergency determination of need applications to transfer ownership of Morton Hospital in Taunton and St. Anne’s Hospital in Fall River to Lifespan, Holy Family Hospital with campuses in Haverhill and Methuen to Lawrence General Hospital, and Good Samaritan Medical Center in Brockton and St. Elizabeth’s Medical Center to Boston Medical Center.

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THE HEALTH POLICY COMMISSION took a back seat last week to Attorney General Andrea Campbell on issues related to Steward Health Care, but to its credit the agency kept its eyes on the bigger issue facing Massachusetts health care policy makers — the longstanding market dysfunction stemming from inequities in health care resources.

Yes, Steward is the front-of-mind issue for most in the health care industry, but it’s clear Campbell wants to move on as quickly as possible and put the whole catastrophe in the rearview mirror. Without waiting for the commission to finish its review, the attorney general has already signaled she will go along with the sale of five Steward hospitals in Massachusetts, the shuttering of two others, and the sale of Steward’s physician group to a subsidiary of private equity player Kinderhook Industries.

I would have loved to see the commission dig into the Kinderhook purchase more, but I get it. Closing that and the other Steward deals as fast as possible is the current priority. It’s time to move on, get Steward out of the state, and focus on equally challenging priorities.

That’s why a presentation last Thursday by David Auerbach, the Health Policy Commission’s research director, caught my eye. He drew attention to the inequities in health care resources that plague our system and often result from having too much market power in the hands of a few big players. Here’s my takeaways from Auerbach’s presentation.

Health care spending has been ratcheting up in recent years, driven by commercial spending growth fueled by higher pharmaceutical prices and increases in hospital outpatient spending.  Massachusetts is now the state with the second-highest family health insurance premiums in the country, behind only New Jersey.   We were fourth or fifth highest a few years ago, so we’re going in the wrong direction.

Annual family health care spending is topping $29,000 per year when you combine employer and family payments for premiums plus out-of-pocket expenses.

A 2023 survey indicates approximately 900,000 people in our state with employer-based health insurance now report that they did not get needed health care due to costs—up from 600,000 in 2021.

There continues to be a wide disparity in payments to health care providers. Our most prestigious and market-dominating hospitals receive inpatient commercial payments far beyond Medicare payment levels, while many other hospitals are paid commercial prices that are much closer to Medicare prices.  

This sort of commercial price variation also exists for outpatient services, and often can be much higher in hospital outpatient departments compared to physician offices.  One example Auerbach provided in his presentation was how the infusion of a standard chemotherapy drug, which on average may require payment of around $10,000 if infused at a physician office or at some lower-priced hospital outpatient clinic. But the cost to insurers is double that for infusion of the very same drug at Dana-Farber or Massachusetts General Hospital. Another example was how a market basket of 50 common outpatient services (labs, imaging, etc.) ran over $50,000 at Boston Children’s or Dana Farber, about double the amount that insurers pay to the 10 or so lowest-charging hospitals in the state for the very same services.

Talk about health care waste.

On that same day, the Center for Health Information and Analysis reported that hospital total margins in the state had improved greatly with a 6.4 percent year-over-year increase, comparing fiscal year 2023 to fiscal year 2022. Even more striking, our larger and most prestigious health care systems grew their net assets. Mass General Brigham’s net assets rose to $17.1 billion, Children’s Hospital grew to $7.66 billion, Beth Israel Lahey Health rose to $3.97 billion, and Dana Farber Cancer Institute went up to $3.36 billion. 

While this asset growth reflects both operating gains and increases in the value of their investment portfolios—it certainly doesn’t suggest that these particular institutions are as financially stressed as they often claim; and more recent data suggests that their net assets have grown even more over the course of the current fiscal year.

In the past, when some insurers in the state have gotten into financial trouble, some of the larger and more stable competitors have come forward to help with low interest loans. But in this current crisis in the hospital sector, none of the bigger players in the industry are stepping forward to help. Instead, the state is coming up with nearly half a billion dollars over the next three years to bail out the hospitals Steward unloaded.  

I would also think that many of the other ‘have-not’ hospitals in the state, while appreciating the immediate need to bailout the six Steward hospitals, are wondering if the state will be there to backstop their operations if they too get into significant financial trouble.

For sure, improving the financial oversight and reporting for all providers with a particular watchful eye for any actions of bad actors is a good idea. But it’s quite possible the next financial emergency facing a health care provider will involve a nonprofit operator, so a better preventative approach would be a state policy increasing the resource flow to more challenged institutions, while holding the revenue growth for wealthier ones in check.

Whether such a redistribution comes from compression of commercial prices, or by paying global budgets to hospitals—that will make for an interesting policy discussion on how best to stabilize needed providers while advancing overall system affordability.

For sure, it seems timely for these sorts of critical ideas and related issues to be front and center in the discussion at the Health Policy Commission’s November cost trends hearings.

Paul A. Hattis is a senior fellow at the Lown Institute.

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