It is the Legislature’s responsibility to ensure that what happened with Steward Health Care never happens again in Massachusetts.

By Ronald J. Mariano and John J. Lawn Jr., published in The Boston Globe

Last week, Steward Health Care filed for bankruptcy protection in Texas, initiating a reorganization process that will include looking for potential buyers for its 30 hospitals, including nine in Massachusetts. The bankruptcy comes at a time of lingering instability within the state’s health care system that continues to struggle as it recovers from the COVID-19 pandemic.

But Massachusetts is ready for the challenge: The Healey administration has been preparing for this eventuality for months through contingency planning, and by meeting with impacted stakeholders. At the same time, our partners in the private sector, after years of a cooperative pandemic response, are once again positioned to step up this time to any potential fallout that may come from the Steward transition.

As this process continues to play out, though, it is the Legislature’s responsibility to ensure that what happened with Steward never happens again in Massachusetts. That means closing loopholes in our regulatory process that Steward exploited for years, gathering more information regarding the finances of Massachusetts hospitals, and stabilizing the health care system. This week, the House of Representatives will begin that work by voting on comprehensive legislation to address those important issues.

The House bill enhances data collection from hospitals and other health care providers by requiring more detailed reporting of their financials, as well as that of their parent organizations and corporate affiliates, including any private equity investments and other sources of for-profit involvement in the state’s health care system.

Crucially, the bill also gives state regulators new enforcement mechanisms to ensure that providers comply with those requirements. Steward has tied up state regulators in court for years by fighting the disclosure of basic information that every hospital in Massachusetts must submit. This bill not only increases financial penalties for failing to provide that information, it also puts a hospital’s license at risk for noncompliance, and blocks hospitals from undertaking any new projects in the state if they’re not meeting their reporting obligations.

Additionally, our bill prevents hospitals from selling the land out from underneath their facilities to real estate investment trusts, like Steward did, which committed their hospitals to paying huge rents on their previously owned land at a time when they were facing immense financial challenges. REITs may be great for investment portfolios, but they’re bad for our health care system. The bill also requires hospitals that are leasing land or buildings for their operations to disclose their lease information to state regulators for additional scrutiny.

In an effort to prevent a tragedy like the one that resulted in a new mother dying at St. Elizabeth’s Medical Center last October, our bill also requires secured creditors, vendors of leased medical equipment, and hospitals themselves to notify the state 60 days before any possible repossession of medical or surgical equipment.

While recent months have revealed the need for each of these reforms, the legislation is about much more than just the lessons learned from the Steward Health Care crisis.

The reality is that our health care system has still not returned to pre-pandemic normalcy. The Legislature has committed $750 million over the past three years to struggling hospitals to stave off the worst consequences of their workforce shortages and financial struggles. While that funding was certainly impactful, this crisis can’t be solved by direct investments alone. That reality is evidenced by the fact that one Central Massachusetts hospital system declared bankruptcy in October, long before the Steward headlines, while others also teeter on the financial edge.

Meanwhile, health care is becoming increasingly unaffordable for the average Massachusetts resident. In a March report, the Center for Health Information and Analysis found that total health care expenditures exceeded $10,000 per Massachusetts resident in 2022, representing a 5.8 percent increase from the previous year. That same report also found that more than 40 percent of people with commercial insurance were enrolled in high-deductible health plans.

To address those challenges, the House bill strikes the important balance between providing the health care system with the necessary breathing room to stabilize itself, with the need for long-term reforms that focus on consumer affordability.

To do that, our legislation reforms the state’s health care cost growth benchmark, the goal the Commonwealth sets annually to keep health care spending under control, to a more accommodating three-year benchmark, and raises expectations on providers to meet state cost containment goals. As part of that process, this bill asks commercial insurers to make important investments in hospitals that have historically been underpaid in order to avoid additional hospital closures or further consolidation with higher-priced hospital systems.

The bill also ensures that the state is engaging in a more active role in health care planning, while also putting heightened scrutiny on more health care transactions. It also establishes a dedicated Division of Health Insurance to review commercial health insurance rates for whether they are affordable for employers who are purchasing health insurance products for their employees, and for consumers.

Given the critical nature of the reforms included in the House bill, we are confident in the strength of our proposal.

Although the Commonwealth’s landmark 2006 health care reform law went on to serve as a model for the Affordable Care Act, we never became complacent, an outlook that allowed for the passage of new, substantial cost containment reforms in the years since.

Ultimately, the reason for our past success has been our ability to recognize when the system was in need of reform, and to then recommit to building a high-quality, affordable health care system for residents across the Commonwealth.

This moment requires that approach.

It’s important now more than ever before that we deliver on that commitment, as patients in Massachusetts deserve nothing less.

Ronald J. Mariano, who represents the Third Norfolk District, is speaker of the Massachusetts House of Representatives. John J. Lawn Jr. represents the 10th Middlesex and is House chair of the Legislature’s Joint Committee on Health Care Financing.

Read the original article in The Boston Globe, here.

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