Mission accomplished?

The sale of Landmark should be followed by a comprehensive accounting of how the money was spent during the last five years

By Richard Asinof
Posted 10/28/13

PROVIDENCE – It looks like the sale of Landmark Medical Center will finally be concluded, more than five years after the nonprofit community hospital went into receivership in June of 2008.

On Oct. 25, Dr. Michael Fine, the director of the R.I. Department of Health, gave his approval to enable Prime Healthcare Services of Ontario, Calif., a for-profit hospital chain, to purchase Landmark and its sister facility, the Rehabilitation Hospital of Rhode Island.

The only remaining hurdle to the sale is the OK from the R.I. Attorney General Peter Kilmartin.

The landscape for health care delivery in Rhode Island has completely changed during these years. The only remaining unaligned nonprofit acute care community hospital in Rhode Island is South County Hospital in Wakefield, and they are currently considering partnership bids from three hospital networks – Lifespan, Care New England and Southcoast in New Bedford, Mass.

Westerly Hospital went into receivership and was sold to Lawrence + Memorial Hospital in New London, Conn., in a deal finalized earlier this year.

Memorial Hospital became part of the Care New England network in a deal concluded in September.

CharterCARE, the corporate parent of Roger Williams Medical Center, St. Joseph Health Services and Elmhurst Extended Care, has signed an agreement with Prospect Medical Holdings, a for-profit firm in California, subject to state regulatory approval.

And, not to be forgotten, the proposed merger between the two largest hospital networks in Rhode Island, Lifespan and Care New England, was called off in 2010.

The business model of an independent community hospital serving a small geographic region is no longer viable in a world where population health management, bundled payments and Accountable Care Organizations will control levels of reimbursement. This is a national trend, not just a Rhode Island reality.

Comprehensive post-mortem
Even before any documents are signed finalizing the Landmark sale, it’s not too early for the state to consider putting together a comprehensive post-mortem on the saga.

For more than five years, Landmark has been run by Special Master Jonathan Savage, who was appointed by Superior Court Judge Michael A. Silverstein. There are years of financial reports detailing how Savage and his law firm spent millions of dollars to keep Landmark open. Rhode Island taxpayers deserve a thorough accounting of how the money was spent, and not just as an analysis delivered by Bill Fischer, who serves as Savage’s public relations consultant at about $9,000 a month, or $108,000 a year, according to the reports.

The twists and turns of Landmark’s attempts to find a suitor – often resulting in the hospital being jilted at the last moment – would make compelling reading in any report, should the state – or the R.I. General Assembly – commission someone to write it. Why Steward Health Care decided to pull the plug at the last moment is still unknown – and worthy of examination.

As a reporter who covered the Landmark story for about four years, what stays with me most when I recall the numerous hearings and courtroom proceedings is the sound of powerful men chuckling, a condescending kind of laughter that Jon Stewart captures so well when he does his impression of former President George W. Bush on “The Daily Show.”

I heard it when I tried to question two of Rhode Island’s top lobbyists, Joseph Walsh and Robert D. Goldberg, at a hearing in early 2012 at the Statehouse, when I asked them about their lobbying efforts on behalf of Steward Health Care to push through legislation that would change the three-year waiting period required for for-profit hospitals to acquire additional nonprofit hospitals in Rhode Island. Both Walsh and Goldberg declined to answer my questions, referring me to Steward spokesman Christopher Murphy, who, in turn, said he couldn’t answer any questions, because he was “unaware” of Walsh’s and Goldberg’s lobbying activities. They all joined in.

I heard it again more recently when Dr. Prem Reddy, chairman, president and CEO of Prime Healthcare Services of Ontario, Calif., offered the first detailed public overview of his hospital network’s plans for Landmark Medical Center in Woonsocket at a public hearing held on July 9 by the Health Services Council of the R.I. Department of Health,

In an interview after the meeting with reporters, Reddy talked in a very animated manner, repeatedly poking his finger within an inch of Providence Journal reporter Felice Freyer’s face, while he launched a verbal attack on Blue Cross & Blue Shield of Rhode Island.

“If you’re a Blue Cross member, you’re already paying through your nose,” he said, punctuating his comment with a heh heh, poking his finger again. “Where is that premium going that you are paying? It’s going into big buildings, into huge millions for salaries.”

Having Blue Cross pay more in reimbursements for Landmark, he continued, “It’s not going to increase your premium. It’s going to decrease [the money going] to pay off the executives,” Reddy said.

Woonsocket will have its community hospital stay open, and Reddy will acquire another hospital for his network. Without a proper accounting of what happened, and how the money was spent, the potential lessons learned will be lost. It's a story that needa to be told.

And, Woonsocket residents should not br surprised to see Landmark look north to Massachusetts to build up its payor base.


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