DPH staff recommends conditional approval of Children's expansion
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The state Department of Public Health has recommended approval of a $1 billion expansion at Boston Children's Hospital, a step that moves the controversial project closer to fruition.
The expansion includes construction of a new 11-story tower at the hospital's main Longwood Medical Area and an eight-story ambulatory care center in Brookline. It would add 71 new beds, along with four operating rooms and two magnetic resonance imaging, or MRI, machines. The hospital has said its capacity is under strain as it treats more complex cases and as international and out-of-state demand grows.
On Tuesday, the state Health Policy Commission said the project could increase health care spending in Massachusetts and destabilize the market for pediatric care, potentially driving competing providers out of business. The project is also the subject of a lawsuit by a group of patients, doctors, donors and parents who argue the plans include demolition of a popular healing garden at the hospital, a claim Children's officials have denied.
The expansion needs approval from the 14-member Public Health Council before it can proceed. The project and the DPH recommendation are slated for discussion at an Oct. 20 meeting.
"From the day we submitted our application, the health needs of the children we care for have been our focus," Boston Children's Hospital President and CEO Sandra Fenwick said in a statement. "We will continue to advocate for improved health care facilities, updated technology, increased access and expanded green space offered as part of our proposed expansion plan at next month's Public Health Council meeting and look forward to earning their support as well."
While hospital officials cheered the show of support for their project, expansion opponents pledged to continue their fight.
Greg McGregor, the attorney for the group suing to halt the expansion, said he and his clients will "aggressively pursue discovery activities in Superior Court, free from political pressure that has so obviously influenced this decision."
McGregor said he was informed last week that the legal case against the hospital and Department of Public Health can proceed, with new amendments to their complaint alleging violations of DPH regulations and the statute governing the state's review of the project to determine its necessity.
McGregor said the department's recommendation ignores "both significant concerns raised by the state's own Health Policy Commission, and objections raised by thousands of patients, families, community members, donors and staff who comprise the Friends of the Prouty Garden."
The Health Policy Commission submitted a letter outlining its concerns to the department earlier this week, the first time it has exercised its discretionary authority to weigh in on a project during the determination of need review.
The commission's analysis, which has been disputed by the hospital, found that the expansion could shift care of Massachusetts patients away from lower-priced providers and increase health care spending by $8.5 to $18.1 million a year for commercial payers.
In an effort to prevent potential spending increases, Department of Public Health staff included in their recommendation a series of conditions of approval, requiring that the hospital would "not cover its approved final incremental operating costs by passing on the costs" to payers and patients, maintain its commitment to serving Medicaid patients, and report related data annually to the DPH.
A DPH spokesman said the recommendation includes "strong remedies in the event the project increases Massachusetts health care spending," and that the hospital's proposal "meets the regulatory requirements and includes many positive aspects to improve care for the children and families the hospital serves."
The recommendation to the Public Health Council includes retaining the authority to limit the number of new beds that are ultimately approved if data show the project is likely to result in higher health spending.
Under the terms recommended by DPH, if the hospital does not comply with its commitment to serve the needs of MassHealth and Children's Health Insurance Program patients, it would be required to make a payment of up to 2.5 percent of the total project cost. This is the first time such a penalty has been recommended, according to the department.
"We agree with the conditions in principle but are still reviewing the precise language and may require clarification as to how the conditions will be implemented," Fenwick said. "We expect to have further discussion with DPH staff these conditions primarily with respect to definitions, methodology and scope."
Fenwick thanked the clinicians, staff, patients and families that have helped the hospital get to this point since submitting its expansion application last December, and said the hospital appreciates and respects "the thoroughness of DPH staff in reviewing this application and recognizing the benefit to patients and families."
On Thursday, Fenwick sent a letter to Health Policy Commission Chairman Stuart Altman and executive director David Seltz, rejecting the conclusion that the update would lead to higher costs and disagreeing with data and assumptions used in the analysis.
"The comments are not a thoughtful deliberation of an application in which 85% of the costs are directly tied to updating our existing physical plant, the oldest among specialty pediatric hospitals in the country," Fenwick wrote.
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