New Cancer Hospital for Dana Farber Leaves Healthcare Experts Skeptical

When the Dana Farber Cancer Institute announced that it was opening a new, $1.7 billion, 300-bed inpatient cancer hospital in 2028 along with Beth Israel Deaconess Hospital, the announcement seemed to promise good news for the region.

President and CEO of Dana Farber Benjamin L. Ebert called the expansion an “extraordinary opportunity for Boston and the Commonwealth.” In a letter to the Massachusetts Health Policy Commission, he emphasized that it reflects Dana Farber’s mission to “expand access to the highest quality cancer care without driving any material increase in health care costs for Massachusetts consumers.”

But healthcare experts aren’t so sure. Several who spoke to The Crimson said that the expansion risks raising costs for patients without obvious justification. They blamed the Massachusetts Department of Public Health, which is responsible for regulating such projects, for failing to verify that the expansion will satisfy an actual need for more cancer beds — instead of merely helping the hospital siphon lucrative cancer patients off from their competition.

“I don’t think that this will decrease costs. I think that it’ll increase redundancy of services,” Donald M. Berwick, the former administrator of the Centers for Medicare and Medicaid Services, said of the announcement.

“So far, we haven’t seen competition in the Massachusetts market — in the Boston area — reduce costs at all,” he added. “On the contrary, there have been constant increases in cost in one of the highest cost communities in the country.”

The Massachusetts Department of Public Health did not respond to a request for comment.

Cancer patients are highly profitable for hospitals, making them essential for smaller hospitals to stay afloat and a source of competition among Boston’s larger hospitals, many of which are among the best for cancer treatment in the world.

At the moment, Dana Farber mainly offers specialty cancer care. Patients who need to be hospitalized because of intensive treatments — such as complications from chemotherapy or surgery — don’t actually stay there. Instead, a patient receiving radiation at Dana Farber might stay at Brigham and Women’s or at a smaller hospital in their community, where they receive their primary care.

The new cancer hospital means those patients will be able to receive both their specialty cancer treatment and their primary care all under the Dana Farber system. The arrangement would be more convenient for patients, though it would come at a cost for the community hospitals who would lose them, even as they depend on such cancer patients for essential revenue.

As a result, Dana Farber is expected to see tens of millions in new revenue, even as the ultimate value for patients remains unclear, experts said.

At a Health Policy Commission meeting on March 20, Chief Medical Officer Craig A. Bunnell claimed that totaling the number of patients currently admitted for cancer care to outside hospitals, plus inpatients at Beth Israel Deaconess — which will jointly operate the new cancer hospital — shows that demand does exceed the proposed 300 beds at the new center.

David P. Ryan, the clinical director of Mass General Cancer Center — which is poised to potentially lose patients to the new Dana Farber hospital — also called on state regulators to limit the new hospital to 126 beds instead of 300, arguing that more beds would increase health care costs.

John E. McDonough, a professor of public health practice at the Harvard School of Public Health and former Massachusetts State representative, said that a recent high-profile merger between Mass General Hospital and Brigham and Women’s systems may have led Dana Farber — which competes with the two — to feel left behind.

“That left Dana Farber with their special dating relationship with Brigham and Women’s kind of standing to the side and wondering, ‘Well, what are we? Chopped liver? What about us?’” McDonough said.

Mass General Brigham — the merged system — recently announced on March 18 its own $400 million investment in developing its own cancer center, particularly renovating existing buildings to increase outpatient space. Many saw the announcement as a response to Dana Farber’s own expansion plans.

Paul Hattis, senior fellow at health care nonprofit the Lown Institute, said the new cancer center could draw revenue away from less prestigious, but essential smaller hospitals.

“They predicted in the first year, about $93 million of patient revenue moving away from those hospitals to Dana Farber,” Hattis said, referring to a report by the HPC.

“We already have a system of haves and have-nots in the States,” he added. “I’m worried that as they draw revenue away from some of the other hospitals, including some of the have-nots, it could destabilize some of them.”

Dana Farber’s new hospital would be eligible for higher reimbursements from Medicare under a federal rule, adding to the potential financial gain.

“Designated cancer hospitals are able to charge the federal government the way that hospitals used to be able to do in the 60s and 70s. Whatever their costs are, they send the bills to the Centers for Medicare, Medicaid services, and they get paid,” McDonough said.

That’s in contrast to its current cancer unit at Brigham and Women’s, which does not get access to the higher reimbursement rates.

Given a list of criticisms made by healthcare experts for this article, a spokesperson for Dana Farber declined to comment. A spokesperson for Beth Israel did not respond to a request for comment.

“I do not think that the condition that the DPH wrote is a satisfactory one to constrain the additional — call it cost growth, and revenue flow that could result,” Hattis added.

Hattis, McDonough, and Berwick each worried that the cancer center represented more the competition for dominance between Boston’s largest hospital systems rather than a real benefit to the public.

“Just understand that it starts with each organization’s self interest. What’s in it for them?” McDonough said.

“These are proud institutions that have, in all cases, done terrific work, but they have a lot of trouble coming up with shared solutions that serve the interests of the public at large,” Berwick said. “They serve institutional interests.”

—Staff writer Stephanie Dragoi can be reached at stephanie.dragoi@thecrimson.com.

—Staff writer Thamini Vijeyasingam can be reached at thamini.vijeyasingam@thecrimson.com. Follow her on X @vijeyasingam.