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Between 2011 and 2019, the share of pediatric discharges for patients who live in central Massachusetts at community hospitals and Saint Vincent Hospital dropped from nearly 16 percent to less than 2 percent, which Health Policy Commission analysts said indicates ongoing industry consolidation. [Screenshot/HPC Presentation]
Massachusetts health care providers have experienced a decline in demand for pediatric services over the past decade, a trend that dovetails with growing provider consolidation that poses access and affordability concerns, officials said last week.
New research from the Health Policy Commission presented to the agency's board found that five hospitals accounted for nearly three-quarters of all commercial pediatric discharges in 2019, an increase of about 10 percentage points over 2011.
While HPC Associate Director for Market Oversight and Monitoring Sasha Hayes-Rusnov said some of the changes reflect nationwide trends not unique to Massachusetts, he also called on policymakers, industry leaders and other stakeholders to grapple with the effects that patients will feel as a result.
"Most of those changes, considered individually, have had really a small potential for impact on spending, access and quality," Hayes-Rusnov said, referring to a range of pediatric expansions and closures in the past decade. "But they've resulted in -- and, we recognize, in some cases have been driven by -- real changes in the landscape for pediatric services in the commonwealth. One of the upshots of those changes is that we see a steadily increasing share of pediatric services delivered by fewer provider organizations."
The trend "starts with demographics," Hayes-Rusnov said: according to UMass Donahue Institute data, the population of Bay Staters between the ages of 0 and 19 years old fell 6 percent between 2010 and 2020 and is projected to drop another 2 percent in the current decade, despite the fact that the total Massachusetts population is set to climb over that span.
Massachusetts acute care hospitals discharged about 30 percent fewer pediatric patients in 2019 than they did in 2011, the HPC found. And in recent years, many have scaled back their services: Hayes-Rusnov said a total of 169 licensed pediatric beds have closed since 2017.
"In practically every case here, these hospitals indicated to [the Department of Public Health] that not all of the beds were being used, and in some cases, some number of these beds that were licensed hadn't been in operation for some time," he said. "While these do represent service closures over time, they also partially reflect shifts in patients that had already occurred."
The state is not alone -- according to Hayes-Rusnov's presentation, the number of pediatric inpatient beds nationwide dropped 11 percent between 2008 and 2018.
A combination of closures and purchases has left industry power players responsible for a greater share of pediatric services.
Hayes-Rusnov pointed to data from central Massachusetts as an example of consolidation. In 2011, a combination of community hospitals and Saint Vincent Hospital in Worcester accounted for nearly 16 percent of pediatric discharges involving patients who lived in central Massachusetts. By 2019, those same hospitals represented less than 2 percent of pediatric discharges for patients in the region.
Over the same span, the share of central Massachusetts pediatric patient discharges jumped from 57 percent to 64 percent for UMass Memorial Medical Center and from 17.3 percent to 27.8 percent for Boston Children's Hospital.
Hayes-Rusnov said early indicators point to a continued trend of consolidation in years more recent than the HPC's data analysis.
There are some benefits to concentrating care in specialized pediatric organizations, he said, including greater flexibility among large providers to invest more in services.
But he warned that state leaders need to keep an eye out for downsides, particularly with overall health care spending and costs on a mostly steady upward trajectory.
HPC board members said consolidation can force families to pay higher costs and travel longer distances for care, particularly when residents from communities outside Boston need to head into the capital city.
"If you get to Boston and you need to stay because your child is inpatient, simply parking, feeding yourself, having to spend the night -- those costs are a tremendous burden on people," said board member Patty Houpt, who previously served as executive director of the New England Employee Benefits Council.
David Cutler, an economics professor at Harvard University who chairs the HPC's Market Oversight and Transparency Committee, said the state "may be forced to take more of a public utility model" if pediatric care continues to be centralized.
"If it's really going to say look, the best thing for kids is really that there will be a very, very small number of very specialized pediatric care providers, maybe we ought to say fine, that's the best way to organize care, but that doesn't have to be the best way to price care," Cutler said. "I think divorcing the changes in how the care is organized from the changes in prices -- I don't want to see us automatically link those two because this may be a circumstance where we don't want them linked. We may not want a ton of competition for providing specialized pediatric services, but we may on the pricing side not want the pricing to be determined just by that concentration."
HPC staff plan to compile the data presented Wednesday and publish a policy brief some time in the new year. --State House News Service
