(Illustration via Canva)

GOV. MAURA HEALEY’S Health Care Affordability Working Group met for the first time earlier this month. The group has chosen to deliberate privately and will now divide its work among four subgroups, focused on provider payment, care in the right setting, administrative waste, and health care workforce.

There is a reasonable argument for doing this in closed-door meetings. Shielded from public posturing, members may feel freer to float bold ideas and test politically uncomfortable solutions. But that rationale only holds if participants are willing to take real risks — including endorsing proposals that may unsettle the very constituencies they represent. Without that courage, privacy becomes insulation rather than incubation.

As the group begins its work, several issues that too often remain at the margins of affordability debates deserve sustained attention.

Capital Spending Without Accountability

Massachusetts has long struggled with the cost consequences of provider expansion. Hospitals and other providers invariably are interested in growing, whether that means adding more beds, new ambulatory sites, expensive high-tech equipment, or offering complex, often highly reimbursed surgical procedures.

Because that growth puts significant upward pressure on health care costs, the state has long had a regulatory system in place to determine if allowing a particular provider to expand facilities or expensive services advances broader state goals—including whether the project accomplishes its care aims “at the lowest reasonable aggregate cost.”

Unfortunately, the Determination of Need process, which is run by the Department of Public Health, tends to evaluate and often approve major capital projects without full attention to this stated goal.

While it does attempt to evaluate some of the potential for cost growth flowing from a project, the process tends to overlook the applicant’s prior pricing behavior or the market power that can result from a project’s completion. Even when it does note some future concerns about cost growth, the state does not consistently enforce forward-looking commitments once approvals are granted.

Consider the recent approval of Dana-Farber Cancer Institute’s new hospital project. Dana-Farber, which has largely been an outpatient cancer care provider, plans to build a 300-bed inpatient hospital in the Longwood Medical Area in Boston. In weighing its application, state regulators largely sidestepped concerns about Dana-Farber’s already high outpatient prices, instead relying on assurances that future inpatient pricing would be restrained.

Similarly, when Boston Children’s Hospital received approval in 2016 for its $1 billion Hale Building expansion — including 71 new inpatient beds — the justification rested on projections that growth would come solely from out-of-state patients. To date, there has been little visible follow-up assessing whether that assumption proved accurate.

If Massachusetts is serious about health care affordability, it should Heaattach enforceable conditions to capital approvals. The Working Group could recommend that the Department of Public Health be empowered by the Legislature to impose post-approval civil monetary penalties — if promised pricing behavior, payer mix commitments, or patient-origin projections are not met. Without meaningful accountability, expansion becomes a one-way ratchet for higher costs.

The Brewing War Over Cancer Dollars

Even before the planned 2028 separation between Mass General Brigham and Dana-Farber Cancer Institute formally takes effect, the competition for cancer patients has intensified. Television ads now saturate the airwaves, with these two dominant providers vying to define themselves as the premier destination for cancer care in Massachusetts and beyond.

The marketing costs of this war for cancer care dollars are visible. Less readily visible are the staggering current and planned capital operational investments in their cancer care systems.

Massachusetts residents are already financing billions of dollars in new construction, expanded staffing, and cutting-edge health care technologies in both systems. As evidence of this capital explosion, now both Dana-Farber and UMass Memorial Health are pursuing additional proton beam therapy centers — despite the fact that two already operate at Massachusetts General Hospital. For certain cancers, including prostate and breast, cost-effectiveness evidence suggests caution before expanding this extremely expensive modality further to such affected patients.

Layer on the coming wave of gene therapies, many priced in the millions of dollars per patient, and the trajectory of health care costs becomes even more daunting—especially with an aging population that will likely have a greater cancer prevalence.

Though Medicare pays for about one-third of all cancer care spending in the US, that still leaves significant burdens on states, businesses, and families to pay the rest. Health economists are predicting that the current 7 percent share of all US health care spending on cancer care will increase — perhaps significantly in a state such as ours, where there is a race to provide the most cutting-edge diagnostics and treatments.

The Working Group should consider asking the state Health Policy Commission, now tasked with state health care planning responsibilities, to carry out a deep dive into the future burden of cancer care—both provider spending and pharmaceutical costs for the residents of our state, and to explore policy ideas for how best to check affordability challenges for the system as well as affected patients and families.

Efficiency: The Missing Side of the Ledger

Since the creation of the Health Policy Commission in 2012, health care policy debate has centered largely on revenue growth — particularly whether provider spending exceeds the cost growth benchmark established by the state. Far less attention has been paid to expenses.

At last fall’s Massachusetts Association of Health Plans meeting, Rachel Block of the Milbank Memorial Fund and Dr. Peter Pronovost of University Hospitals Cleveland made a compelling case that improving hospital operating efficiency and reducing waste may be as important as constraining price growth.

A report presented at the meeting suggests that substantial variation exists in hospital cost structures. Yet transparency around provider operating expenses remains limited, and benchmarking is sporadic at best.

If some hospitals are struggling financially while others command premium prices, the answer cannot simply be ever-growing revenue streams. The working group — and ultimately the Legislature — should consider mandating robust expense reporting and comparative efficiency metrics. Accountability must apply to both sides of the ledger.

AHEAD as a Next-Generation Reform Option

Finally, Massachusetts should seriously examine participation in the comprehensive federal AHEAD initiative — Achieving Healthcare Efficiency through Accountable Design — administered by the Centers for Medicare & Medicaid Services.

AHEAD is an attempt to give states the ability to redesign how health care is delivered and paid for so that providers are rewarded for quality and outcomes rather than the volume of services. Six states — Connecticut, Hawaii, Maryland, New York, Rhode Island, and Vermont — have already signed on.

The goal is to use financial incentives to encourage hospitals, physicians, and other clinicians to coordinate care, use data to avoid unnecessary tests and treatments, and focus on keeping patients healthier. Key requirements include a state encouraging primary care providers — paid a fixed, risk-adjusted amount per patient — to use an advanced form of primary care that includes behavioral health integration and patient outreach, with bonuses for hitting quality and total cost of care savings targets. The initiative also encourages a design where hospitals are paid fixed budgets, but can also share in savings if avoidable admissions and emergency department utilization is reduced—especially for chronic disease conditions.

State government’s health care leadership should fully explore the plausibility of Massachusetts going forward with an application, and brief the governor’s working group on the pros and cons of applying. If Massachusetts wants to move beyond incrementalism in tackling health care costs, such a federal-state partnership could provide both financial support and structural discipline.

Leaning Into Discomfort

Wherever the working group ultimately lands, one reality is unavoidable: modest tweaks will not bend Massachusetts’s cost curve. Passing a limited primary care reform bill or refining existing oversight tools may help at the margins, but the scale of the affordability challenge demands more.

Real progress will require confronting market power, restraining duplicative expansion, demanding operational efficiency, and embracing payment reform that shifts risk and accountability. None of these steps are politically easy.

If the working group uses its private sessions to confront those discomforts directly, it may justify its closed-door deliberations. If not, it risks becoming another well-intentioned exercise that diagnoses the problem without prescribing the cure.

Massachusetts has rarely shied away from health policy leadership. Landmark coverage expansion two decades ago reshaped the national debate, and the state’s cost growth benchmark helped define a new model of fiscal stewardship that seemed to work effectively in its initial years. Now, other states have copied key aspects of our benchmark framework, but are doing so with more teeth applied to penalties when providers’ revenue flow exceeds benchmark targets.

Those moments where we were first out of the box were not born of consensus or comfort — they emerged from a willingness to act before the path forward was fully settled. But leadership is also about reevaluation when conditions change, and then acting accordingly.

Today, the Commonwealth is called upon to do just that as it faces a period in which a new era of affordability pressures are eroding household security, straining employer coverage, and crowding out public priorities. The question is no longer whether the problem is serious, but whether the response will be commensurate with it.

The working group was convened not to catalog familiar concerns, but to chart a course through them. Doing so will require members to challenge institutional loyalties, rethink longstanding assumptions, and support solutions whose benefits may extend well beyond their own sectors.

The opportunity is real. So is the risk of hesitation.

Paul Hattis is a senior fellow at the Lown Institute and co-host of the monthly Health or Consequences episodes of The Codcast.