PROVIDENCE – The health care delivery system is in flux in the region, not just in Rhode Island but in Connecticut and Massachusetts as well.

Westerly Hospital was acquired in 2013 by Lawrence + Memorial Hospital in New London, Conn., which in turn announced in 2015 that it planned to merge with Yale New Haven Hospital.

But Conn. Gov. Dannel P. Malloy issued an executive order on Feb. 25 placing a moratorium on some hospital mergers, including that proposed by Lawrence + Memorial and Yale New Haven hospitals, because of the state’s concerns about quality and costs for consumers. The moratorium, seeking to halt the musical chairs of consolidation, acquisition and merge now underway in Connecticut, will last until Jan. 15, 2017.

“With continuing changes in the health care industry, it is critical that our state laws ensure that all hospitals continue to thrive, and that the deck is not stacked in favor of fewer than a handful that dominate the marketplace,” Malloy said, as reported in a story by The Hartford Courant. “We need balance. Fewer health care systems mean fewer choices for consumers, and that can dramatically affect both the quality of care and costs. It's time we take a holistic look at the acquisition process.”

Ballot measure in Massachusetts
In Massachusetts, after efforts to establish a state commission to rein in medical costs has proven unable to enforce spending limits, a statewide ballot question is being promoted by a health care workers union, 1199 SEIU, in attempt to correct what some have called unwarranted price disparities between hospitals that cannot be explained by traditional measures of consumer value, according to a recent article in Commonwealth.

Under the terms of the ballot question, licensed commercial insurance companies would be barred from paying any hospital more than 20 percent above or 10 percent below what’s known as the “carrier specific average relative price” for a service, according to the Commonwealth article.

If the ballot question were enacted, the big loser would be Partners Healthcare; with the referendum costing two of the hospitals it owns about $438 million – $254 million from Massachusetts General Hospital and $184 million from Brigham and Women’s Hospital, according to union estimates, as reported by Commonwealth.

In turn, that money would be redistributed to other hospitals: Lowell General Hospital would receive $27 million. Cambridge Health Alliance would get $22 million. CareGroup, which owns Beth Israel Deaconess and Mount Auburn Hospital, would pick up a total of $17 million. Baystate Health and Lahey Health would each receive $10 million, New England Baptist would get $7 million, Boston Medical Center would recover nearly $4 million, and Tufts Medical Center nearly $3 million, according to projections quotes in the article.

At a legislative hearing on March 18 on the ballot question, Steward Health Care, owned by a private equity firm, testified in favor of the ballot question. Overall, Steward would receive some $21.4 million, according to reports.

Paul Levy, author of Not Running a Hospital, called Steward’s support for the petition “humorous.” Levy wrote: “That system has always bragged about being a ‘low-cost’ alternative to the pricey academic medical centers. It now seems to realize that it is not really ‘low-cost’ but simply ‘low-paid.’”

For years, Levy continued, Steward sent its “tertiary referrals to Partners’ Massachusetts General Hospital, the highest paid tertiary center,” a move that Levy said undercut the profitability of the global payment-based system Steward had chosen to sign with insurers.

An island in the storm
As president and CEO of Rhode Island’s only remaining unaffiliated acute care community hospital, Louis Giancola occupies a unique vantage point as he attempts to navigate the turbulent waters swirling around Rhode Island’s health care delivery system.

Giancola has supported South County’s efforts around the creation of one of the first 11 Health Equity Zones in Rhode Island, what’s known as the South County Healthy Bodies, Healthy Minds community approach to promoting long-term health.

The effort has targeted childhood obesity and children’s mental health, based on several evidence-based programs, working in collaborative fashion with numerous partners. They include:

• Healthy eating, working with Thundermist community health center to connect farmers markets with low-income residents;

• Healthier lifestyles, fashioning a local approach to the national 5-2-1-0 campaign to help children adopt healthier activities, with five fruits and veggies a day, two hours or less of recreational screen time, one hour or more of physical activities and zero sugary drinks;

• Early childhood literacy, promoting, as part of early well-baby visits by pediatricians, handing out books to parents to read to the baby, modeled on the evidence-based Reach Out and Read program.

• Adolescent mental health, training educators and people who work with youth to recognize early warning signs, working in partnership with the Youth Mental Health First Aid program, active in all of the region’s school systems; and

•A deep data dive to identify those communities and neighborhoods in the region that appear to be facing the greatest challenges and health disparities, directed by Wood River Health Services, a community health center serving Washington County.

In an article published by ConvergenceRI, Giancola explained the rationale behind the emphasis of addressing community needs: “We have known for some time that, at most, health care contributes 20 percent to the health status of individuals; genetics contributes an equal portion,” he wrote. “The biggest drivers of health – what are often referred to by public health experts as the social determinants of health – are poverty, education, and healthy relationships.”

The path forward
Now, six months later, Giancola talked with ConvergenceRI about the importance of the ability to respond to the needs of the community, even if the way toward financial rewards is not a straightforward path.

“I have come to believe,” he said over coffee early one morning last week at Olga’s Cup + Saucer, “that if we’re truly committed to promoting health, we need to have a very strong community presence and the ability to respond to the needs of the community.”

What is not so clear, Giancola continued, “is how we finance that on an ongoing basis, because even with the movement to population health, the kinds of things that we need to do are not necessarily supported under those alternative payment methodologies.”

Behavioral health, he explained, “which happens to be a strong focus of our community coalition now, is a good example: there is a lot of money and lot of focus on the severely and persistently mental ill.”

Giancola said that in a population health model, many health industry practitioners see the opportunity to save money. “But I think the issue of behavioral health is much broader than that population, which is thought to be something like 9,000 people in Rhode Island,” he said.

However, he continued, “There are an awful lot of people who have behavioral health problems that don’t fall into that category. And, we’re not dealing with the conditions in the community that create those problems.”

The connection to chronic diseases
Giancola also pointed to the relationship between chronic diseases and behavioral health problems. “We are not dealing with the fact that [many of] those behavioral health issues also manifest themselves in other kinds of diseases, usually chronic diseases, which make it hard to treat chronic diseases.

There a number of pilot programs now underway to attempt to integrate behavioral health issues with the patient-centered medical home model, under the direction of the Care Transformation Collaborative.

Was one of the difficulties, ConvergenceRI asked, in how providers get reimbursed?

“I think you are absolutely right,” Giancola responded. I think that integrating behavioral health into a patient-center medical home has been a challenge. I also think we’re learning how to do it better. But we’re not necessarily learning how to finance it.”

And that is where alternative payment methodologies come in, Giancola continued. “If you can actually make sufficient gains in terms of reducing other kinds of expenditures by integrating behavioral health into the patient-centered medical home, it may all work out. But that takes time, and you’re not going to see the results overnight.”

How communities will be defined under ACOs
Giancola and ConvergenceRI shared perspectives about how the new models of accountable care organizations and accountable entities with managed Medicaid programs were being developed in Rhode Island.

For Giancola, one of the worries was about how the population of Rhode Island was going to be divided up.

“I worry about this a lot,” he said. “There are a million people in Rhode Island, and you’re going to carve the population up by ACOs, which is not consistent with communities, not geographically. It will be payer specific, and it is going to cut across a lot of different communities.”

This was a dilemma, Giancola continued. “It does worry me that the [ACO] will then try and manage a population carved out by contracts. But, it’s not a community.”