PAWTUCKET – Predictable outrage greeted the decision by the board of directors of Care New England to effectively close down Memorial Hospital, halting all inpatient and emergency operations, after negotiations to sell the financially strapped facility to Prime Healthcare Foundation broke down during the last few weeks.

What exactly led to the unexpected breakdown in Prime’s plans to buy Memorial is unknown and unshared; negotiations had been ongoing since a letter of intent between Prime and Care New England had been announced on April 17. Getting to “yes” on a signed purchase asset agreement proved to be a hurdle too high.

The for-profit division of Prime currently owns Landmark Medical Center in Woonsocket and the Rehabilitation Hospital of Rhode Island in North Smithfield, but the California-based owner had announced plans earlier this year to transfer those assets to its nonprofit foundation.

Landmark is currently planning to open a new, $11 million Level III trauma center adjacent to the existing hospital, financed by its for-profit parent company, with a scheduled opening date for January of 2019. The new facility is projected to serve some 5,500 patients a year, with the bulk of the patients being victims of auto accidents, according to Landmark officials.

For Care New England, shedding the financial liability for Memorial had been a key component of the health system’s pending deal to merge with Partners Healthcare; Memorial had lost $23 million in the past fiscal year, according to Care New England officials.

The breakdown in negotiations may have been related to whether Care New England or Prime would retain control of the Family Medicine Residency program with the Warren Alpert Medical School at Brown University, currently based at Memorial, according to the speculation of some observers. The residency program, with its steady flow of cash in annual revenue, is funded through the federal Centers for Medicare and Medicaid Services. Care New England may have wanted to preserve the residency program and transfer its home to Kent Hospital.

In the news release announcing its plans, Care New England pledged that it would maintain “a robust primary care presence” to ensure high quality patient care during the transition. The necessary regulatory applications, known as a reverse certificate of need, have not yet been filed by Care New England with the R.I. Department of Health, reflecting the suddenness of the unexpected outcome of negotiations with Prime.

Some 700 workers will be displaced, with the hope that many will find jobs either within the Care New England health system or at other hospitals in Rhode Island.

Denial and anger
In response to the news, it was as if many of Rhode Island’s elected officials went through the first two stages of the five stages of grief about death: denial and anger about the demise of Memorial, an acute care community hospital in Pawtucket that could only fill 12-15 inpatient beds out of a total of 294 on a daily basis.

The next stages of grief – bargaining, depression and acceptance – will occur, not on some kind of linear time line, but rather as elected officials come to grips with the fact Memorial is dying, and any heroic effort to try and resuscitate the hospital will fail.

The residents of Pawtucket and surrounding communities have already voted with their feet, seeking care elsewhere. Memorial was comatose, on life support, when Care New England finally decided last week to pull the plug.

What killed Memorial are not so much Care New England’s efforts to consolidate the hospital as part of its health system but the chronic diseases afflicting the U.S. health care delivery system:

• 95 percent of health care dollars flow to treatment, not prevention;

• Unsustainable medical costs keep rising even as health outcomes keep declining;

• The business model for many smaller hospitals is no longer economically viable; and

• The growing unmet needs related to the social determinants of health, recognizing health occurs in the community, not in the hospital or in a doctor or nurse’s offices.

Translated, the disappearance of industry, and with it, the disappearance of jobs with health benefits, a rising percentage of Rhode Island's population on Medicaid, and a cut in Medicaid hospital rates, can be seen as the real culprits in the demise of Memorial and the deteriorating condition of the remaining hospitals.

Ironically, Care New England as a health system has moved aggressively to create a system-wide accountable care organization, Integra, with a focus on integrated primary care, reduced hospital admissions and readmissions, focused on delivering care at the right time and the right place.

In many ways, the death of Memorial reflects the ongoing sea change in how providers and health systems are paid, moving from fee-for-service to bundled reimbursements for a continuum of care, not just for each and every procedure.

The driving force behind these changes are Medicare and Medicaid, the federal health insurance programs that provide roughly 60 percent of all the money flowing into the coffers of hospitals. The federal health insurance programs have put in place incentives for bundled payments for reimbursements, based upon achieving better health outcomes, with an emphasis on reducing hospital stays and preventing unnecessary hospitalizations.

As J. Alan Kurose, the president and CEO of Coastal Medical, once described it, providers are much like a person with one foot in two different boats, trying to navigate between fee for service and bundled reimbursements.

Yet, in the wake of Memorial’s impending death, an opportunity exists to fashion a new kind of health system in Pawtucket and its surrounding communities, based upon community-based expanded primary care practices, the roots of which are already growing in Central Falls.

Big outrage, little insight
The outrage by elected officials was dutifully reported by the news media, without much insight into the actual causes surrounding the impending death of Memorial:

• In terms of denial, there was Lt. Gov. Dan McKee, who said in a statement: “We owe it to the city of Pawtucket and state of Rhode Island to revisit all serious offers that keep Memorial Hospital’s doors open,” as reported by WPRI. “This approach would preserve industry talent, protect jobs and promote maintaining health care services in Rhode Island.” The problem: there were no other serious offers.

• In terms of both anger and denial, there was Pawtucket Mayor Donald Grebien, who said in a statement: “I am extremely disappointed in this decision by Care New England to abandon our community hospital during their transactions, putting their agreement with Partners above the one with Prime,” as reported by the news media. The problem: Memorial had been bleeding out financially for years before Care New England acquired it in 2013.

Where was the public “disappointment” voiced about the financial problems of Memorial under the former president and CEO at Memorial, Frank Dietz? Dietz had allegedly managed to spend down some $50 million in an unrestricted hospital endowment fund, with no board pushback, in the three years preceding the sale. Where did that money go?

Dietz’s successor, Martin Tursky, quit less than a year after assuming the helm, to skedaddle back to Ohio, claiming family responsibilities, but it turned out he had arranged a new job for himself.

Further, Dietz had hired a chief of obstetrics, at a salary of about $350,000 a year, who allegedly could not be involved with direct patient care because he did not have and could not obtain malpractice insurance, numerous sources told ConvergenceRI. The chief of obstetrics allegedly served in that position for three years, at a cost of more than $1 million, if you factor in benefits.

In response to Care New England’s recent decision, Grebien threatened possible legal action to recoup Memorial’s assets. In an Oct. 19 letter, he asked Gov. Gina Raimondo to direct the R.I. Department of Health to appoint a special master in order to protect the long-term stability of the delivery of health care services. The problem: only a Superior Court judge can appoint a special master, if and when a privately held hospital enters receivership.

• Raimondo, perhaps exhibiting the third stage of grief, bargaining, told the news media that she had had conversations with the leaders of two competing health systems with Care New England, Lifespan and CharterCARE. “I want you to dig in here and make it so that all these people get jobs,” the Governor said she told the other hospital leaders, according to The Providence Journal, adding that both said they had openings.

The problem: the reality, however disliked, is that the old business model of a hospital serving as a hotel seeking high occupancy rates no longer works, whether in Pawtucket or, for that that matter, anywhere else in Rhode Island.

Further, Pawtucket is no longer a center of commerce, with a middle-class community sustained by good-paying jobs created through a thriving manufacturing sector, with the ability to support an acute care community hospital.

The evidence, in both rural and urban settings, suggests that acute care community hospitals dependent on inpatient beds for revenue will go the way of brick-and-mortar video rental stores or many industrial factories – empty, shuttered, boarded up or repurposed.

“There is no evidence that the number of hospital beds has any public health import except in so far as they generate more medical costs,” said Dr. Michael Fine, senior population health and clinical officer at Blackstone Valley Community Health Care and chief medical strategist for the city of Central Falls.

Too many hospital beds, Fine continued, often increased the risks of over-treatment and hospital acquired infections.

The opportunity
With the impending demise of Memorial Hospital, the largest remaining provider of health care services for residents of Pawtucket and Central Falls is Blackstone Valley Community Health Care, a community health care center.

“My priority is to reassure people that good quality health care is still accessible here in Pawtucket and Central Falls,” said Ray Lavoie, the executive director of Blackstone Valley Community Health Care.

“We’re expanding,” Lavoie continued. “Ours is a community health care system, not a sick care system.”

The manifestation of that approach, Lavoie explained, is the new 47,000-square-foot facility being built at 1000 Broad St. in Central Falls, a Neighborhood Health Station, with the goal of increasing primary care and preventative care. The new facility is scheduled to open in September of 2018.

“We were early adopters, early believers,” Lavoie said, in the concept of patient-centered medical homes and in integrating behavior health and primary care. “We often saw a number of uninsured patients, providing them with care,” Lavoie continued. “So we had to become proficient at providing lower-cost, higher quality care by focusing on preventative care – something that hospitals were not necessarily focused on.”

With the new Neighborhood Health Station, Blackstone Valley will be able to provide primary care to about 90 percent of the residents of Central Falls, Lavoie said. And with that, Blackstone Valley will have a more complete electronic patient record for most of the residents of the city, allowing the health center to identify and reach out to those with health needs.

“It’s a lot more proactive and can lead to lower overall cost than waiting in the wings [for patients] to become ill and need hospitalization,” Lavoie said.

To date, neither Care New England nor Gov. Gina Raimondo has reached out to Lavoie to discuss the Memorial Hospital situation, which does not bother him. “We want to devote ourselves and our work to the patients, not the political arena. We let our work do the talking. If we do our job well, that’s what matters in the long run.” [Care New England is scheduled to come to Blackstone Valley on Friday, Oct. 27, to discuss the situation and see what the community health center can do to help, according to Lavoie.]

If the Family Medicine Residency program moves to Kent, Lavoie explained, in his opinion, the patients are unlikely to follow the program to Kent. “The patients are here, and they probably won't be inclined to travel far for primary medical care,” Lavoie said. “That is why we are expanding our operations with the Neighborhood Health Station in Central Falls, so we can accommodate more of them.”

In the meantime, Lavoie told ConvergenceRI that he is considering ways to expand existing capacity by extending the hours of operation at Blackstone’s main facility at 39 West St. and at its satellite facility at 1145 Main St. in Pawtucket, to serve a potential overflow of patients in response to the closing of Memorial.

Retooling health care in Rhode Island
In an interview with ConvergenceRI, Fine, the former director of the R.I. Department of Health, cautioned that the demise of Memorial was not a time for panic but rather use it as an opportunity to retool the system of health care.

By expanding the number of Neighborhood Health Stations in Pawtucket, developing four new facilities to serve Pawtucket’s 70,000 residents, Fine said, “We could save between 30 percent and 40 percent of what we are now spending and improve public health outcomes significantly.

Four new neighborhood health stations, Fine continued, would “employ about the same number of people [as Memorial], extend life expectancy, and reduce infant mortality.”

The health of a community improves when you improve primary care supply, he said, seeing it as a driver for economic growth.

“We need to look at the evidence instead of making political calculations,” Fine said.

As an example, Fine pointed to the way that emergency department services are often utilized. “Fifty to 75 percent of emergency department services calls that are ambulatory sensitive [conditions that could have been treated in the primary care setting rather than the ER] are for patients who do not need to be in a hospital to begin with,” he said.

The problem, Fine continued, is that patients often lack access to primary care. With the Neighborhood Health Station in Central Falls, Blackstone Valley is currently coordinating efforts with city’s emergency services department, connecting the patient with primary care when appropriate.

Mourn, then move on
At a public hearing convened on March 17, 2016, by the R.I. Department of Health to hear testimony about the planned closing of the birthing center at Memorial Hospital, Dr. Jeffrey M. Borkan spoke before an audience of more than 100 people gathered in Central Falls at the Segue Institute for Learning on Cowden Street.

Borkan is the physician-in-chief of the Department of Family Medicine at Memorial Hospital, and chair and professor in the Department of Family Medicine and assistant dean for Primary Care-Population Medicine at The Warren Alpert Medical School of Brown University.

It was an uncomfortable moment for Borkan; many in the crowd did not want to hear what Borkan had to say; few applauded when he finished.

Here is how ConvergenceRI reported what happened: Borkan said that he was following the same advice that he gives to residents: always say what’s on your mind.

For Borkan, who has spent much of his career at Memorial Hospital, the reality was that the community hospital in an urban setting no longer worked financially. “I think it’s over,” he admitted.

In the same way that factories have closed down and the jobs have left, the same was true for community hospitals such as Memorial – despite the efforts to keep it running with sticks and glue, despite the efforts by Care New England – because the nature of the health care industry had changed.

“The hospital industry has changed,” he said. “We have tried to keep Memorial open. It was special; it is special.”

Borkan did not blame Care New England, which he said had poured in “millions and millions to try to keep the hospital afloat.”

Now, it was time to mourn the losses and move on, and create a new future, Borkin continued.

“We need to look forward and ask: where do we go from here? We need to mourn for what is lost and move on.”