Delivery of Care

Following the money, the lobbyists and the patient outcomes

The effort to tweak the Hospital Conversions Act to allow for an expedited review of the proposed sale of Memorial Hospital offers a window into the opaqueness of health care policy

Photo by Richard Asinof

The R.I. Senate Committee on Health and Human Services met on June 8 to consider legislation to tweak the Hospitals Conversion Act to allow for a expedited review of the proposed sale of Memorial Hospital to Prime Healthcare Foundation. A revised bill is expected to be presented on Tuesday, June 13.

By Richard Asinof
Posted 6/12/17
The effort to expedite the review of the pending sale of Memorial Hospital to Prime Healthcare Foundation through the tweaking of the Hospitals Conversion Act in the R.I. General Assembly is a story that reverberates with questions about the alignment of the future health care delivery system and the financial health of hospitals.
When will Rhode Island develop a state health care plan about how best to evaluate future strategic investments in health care? What are the potential liabilities of depending on technological IT solutions to improve the delivery of care, as demonstrated by the failure of the UHIP system? When will the development of health equity zones and neighborhood health stations be given equal footing within the academic medical enterprise? How will new leadership at the R.I. Office of the Health Insurance Commissioner, with the appointment of Marie Ganim, deputy chief of staff and policy director for the R.I. Senate, to replace the retiring Kathleen Hittner, change the direction of the agency? How much of a projected $201 million hole in the proposed FY 2018 state budget will be addressed by cutting benefits and services to Rhode Island’s most vulnerable citizens?
The future workforce needs of the health care sector in Rhode Island will be the focus of a summit on Friday, June 16, at the Crowne Plaza, with a new report on health care workforce transformation the focus of the discusson. The report is a by-product of the ongoing State Innovation Model initiative, in an effort to design better training for those entering the future health care workforce.
What it doesn't appear to do is to explicitly address the tension between a hospital-based health care world, with physicians in charge of decision-making, and the growing role that nurses, nurse practitioners, physician assistants play in the delivery of care. One of the recommendations discussed to deal with the scarcity of child psychiatrists is to have clinical psychologists be retrained as nurse practitioners, so that they would then be able to prescribe meds. Really?
Another gap in the report is how risk and shared savings will be applied to workers within an accountable care model.
A third area that is not covered is the changing relationship between providers and patients, in a patient-centric, patient-driven model of care.

PROVIDENCE – All health care is personal. But the decisions made about health care policy are often opaque, the result of conversations and deals made behind closed doors, such as the web now being spun by 13 white male Republican senators in Congress, without any public hearings, to shape the Senate version of Trumpcare to repeal and replace Obamacare.

Here in Rhode Island, legislation is now being considered to allow an expedited state review of the deal by Prime Healthcare to purchase Memorial Hospital of Rhode Island, in a bit more open process.

Testimony was heard at a hearing held on June 8 by the R.I. Senate Health and Human Services Committee, in a crowded Room 211 at the State House. The actual wording of the revised bill is still a work in progress, with the desire to tweak the language in the Hospital Conversions Act in a way that it did not undercut the original protections of the law.

The final version of the revised bill needs to be ready by Tuesday, June 13, according to Sen. Joshua Miller, chair of the committee, with the expectation that the new wording would be negotiated in conversations involving Don Widener, the committee’s lawyer, legislators, and input from lawyers representing Prime and Care New England.

The sticking points involved the precise definitions of for-profit and not-for-profit hospitals. At the hearing, it was revealed that the not-for-profit Prime Healthcare Foundation would be the actual purchaser. Prime Healthcare Services, the for-profit health system, purchased Landmark Medical Center in 2013; it is now in the process of transferring ownership to the not-for-profit Prime Healthcare Foundation, pending successful completion of state review.

[For those health care policy aficionados, a similar effort to create an expedited review process was made in 2012 to speed the proposed sale of Landmark Medical Center to Steward Health Care, but Steward then inexplicably withdrew its plans to purchase the hospital.]

A brief history lesson
As barkers at ballgames often proclaim, you can’t tell the players without a program.

The larger context for the new tweaks to the Hospital Conversion Act is the ongoing conflict around capturing market share by health care delivery systems:

The old business model for acute care community hospitals – the hospital as hotel – no longer works, just as the old economic infrastructure based upon manufacturing jobs no longer exists.

Memorial Hospital's current daily patient census is about 50 occupied beds in a 291-bed hospital, a recipe for red ink.

To survive, hospitals and health systems must adapt by moving toward population health management based upon the changing reimbursement strategy by Medicare and Medicaid to pay for a continuum of care, articulated as investing in value over volume. This requires covering a larger population base to make the revenue margins work.

As a result, to accomplish this, there has been an ongoing “struggle” of musical chairs in Rhode Island:

Landmark entered receivership in 2008, before being bought five years later in 2013 by Prime Healthcare, a for-profit health system with headquarters in California. Prime is now planning to convert Landmark and its sister facility, the Rehabilitation Hospital of Rhode Island, to a not-for-profit status under the Prime Healthcare Foundation.

Westerly Hospital went into receivership and was bought in 2013 by Lawrence + Memorial Hospital in New London, Conn., which was subsequently purchased by Yale New Haven Hospital in New Haven, Conn.

In 2014, the CharterCARE health system, which includes Roger Williams and Fatima hospitals, entered into a partnership with Prospect Medical, a for-profit health system based in California.

Southcoast Health in New Bedford, Mass., explored partnerships first with South County Health in Wakefield, R.I. in 2014, but talks fell apart. In 2015, Southcoast Health began partnership talks Care New England, before ending the conversation in 2016.

The latest musical chairs have involved Care New England signing a letter of intent to partner with Partners Healthcare, the largest health system in Massachusetts, and, at the same time, shed itself of Memorial Hospital by selling it to Prime Healthcare Foundation. The deal with Partners appears to be contingent upon quickly consummating the deal with Prime.

South County Health remains, for the moment, the only unaligned acute care community hospital remaining in Rhode Island, but with a strategic focus on expanding its community reach in Westerly and in East Greenwich.

The subtext
Of course, the biggest ongoing battle in Rhode Island’s musical chairs is between Lifespan and Care New England. There have been at least five attempts to negotiate a merger between the state’s two largest health systems, to no avail. Two were by former Gov. Lincoln Chafee and a third was by current Gov. Gina Raimondo, each attempting to broker a forced marriage, with the governors playing the role of yentas.

Lifespan, in turn, has pursued an aggressive, competitive strategy to capture a greater share of the women’s health market, including the pending proposal to build a competing birthing complex a few hundred yards from Women & Infants Hospital.

The backstory is that in 2011, a number of clinicians who had been working at Women & Infants were lured away by Lifespan to set up the Women’s Medicine Collaborative. Lifespan also brought one of the largest ob-gyn group practices, OB-GYN Associates, into its fold.

The culture clash between Care New England and Lifespan has a Shakespearean quality to it, much like the feuding families of the Montagues and Capulets in “Romeo and Juliet.”

The latest wrinkle
Into this battle over turf Brown University and its Warren Alpert Medical School have added a new wrinkle, the creation of Brown Physicians, Inc., a large group practice with more than 500 physicians [and an unknown number of nurses, nurse practitioners, physician assistants and community health workers. Defining the size of group practices by the number of physicians is, in many ways, a backward-looking view of modern health care.]

The six physician groups joining together in Brown Physicians, Inc., include: Neurology Foundation, Inc.; University Emergency Medicine Foundation; University Medicine Foundation; University Surgical Associates, Inc.; Brown Urology; and Brown Dermatology, Inc. [See link to ConvergenceRI story below, “New large group practice created, Brown Physicians, Inc.]

Brown Physicians, Inc., is a new structure for specialty and sub-specialty clinical practices. The unanswered question is: what happens to the other Brown medical school teaching programs, such as the nurse midwives program for residents and medical student and the family medicine residency program?

The future of eds and meds
One of the plums of the Memorial sale is the Brown University Family Medicine residency program, which is now headquartered at Memorial Hospital. With the sale of Memorial to Prime, the clinical teaching program under the direction of the Warren Alpert Medical School will become a wholly owned entity of Prime.

From a financial perspective, one advantage of a medical school academic teaching program is that Medicare provides for increased reimbursement.

ConvergenceRI reached out to a number of the players to try and get some clarity about the future interactions with clinical teaching programs at Brown and Brown Physicians, Inc.

Dr. Jeffrey Borkan, chair of the Department of Family Medicine, thanked ConvergenceRI for reaching out, but said there was not “anything of substance” to say at this point, but as things evolved, he would be happy to talk. “The Dean [Dr. Jack Elias] is probably a better source regarding Family Medicine,” Borkan said.

ConvergenceRI also reached out to Brown University, asking specific follow-up questions. They included:

How will Brown Physicians, Inc., build relationships, or not, with other Brown residency programs, such as the Nurse Midwives program and the Family Medicine Residency program at Memorial?

Are there extra payments from Medicare that will be forthcoming to Brown Physicians, Inc., as a result of the teaching affiliation with Warren Alpert Medical School?

To date, no response has been received.

ConvergenceRI also reached out to Care New England, specifically to ask about the nurse midwives program, which has evolved into a respected national model. [See link to ConvergenceRI story below.] The questions included:

Has there been any outreach from Brown Physicians, Inc., to discuss a potential relationship?

How disruptive is Brown Physicians, Inc., to the current collaborative relationships that already exist between the nurse midwives program and other practices?

To date, no response has been received.

Collaborator or competitor?
ConvergenceRI also reached out to Ortho RI, one of the largest group orthopedic practices in Rhode Island, to ask how they viewed the creation of Brown Physicians, Inc. Here are the responses from Mary Ellen Ashe, the executive director of Ortho RI.

ConvergenceRI: How does the creation of the new Brown Physicians, Inc., impact Ortho RI, if at all?
We have been seeing this trend nationally. Academic multi-specialty groups have been coming together to address issues important to their members, particularly teaching and translational research.

Many of the Ortho RI physicians trained at Brown. We often refer to our leadership team as the “Brown Alumni Club,” since most are Brown trained. In terms of training background, we share a good deal of common ground with Brown Physicians, Inc. However, as a single specialty, independent practice, our organizational focus is different.

ConvergenceRI: Are they a potential future collaborator or competitor?
Collaborator. We see the consolidation as a continued opportunity to engage in collaborative conversations. Working with larger groups is a more efficient way to identify opportunities to better serve their patients and to achieve what our community wants and needs: more affordable prices, better access and better quality. The infrastructure of larger groups facilitates the sharing of insights and best practices.

ConvergenceRI: Do you expect that there will be a similar growth in aligned practices in Rhode Island around specialty and sub-specialty practices?
Pivoting from volume-based reimbursement to value-based care makes payer contracting and analytics more sophisticated. That is a major driver in physicians either consolidating or opting to work for hospital systems. It is very hard to do for a small practice. According to a study of American physicians published in 2014, physician employment by hospitals increased almost 40 percent between 2008 and 2014. So, yes, we see continued consolidation and alignment in Rhode Island.

ConvergenceRI: How is the new Brown Physicians, Inc. creation different that what was done by Ortho RI?
There are similarities. We both serve patients and are committed to better access, affordable prices and great quality. However, Ortho RI is a single specialty, independent group practice. Our governance and decision-making model is a bit different. Meaning, Ortho RI has evolved since we first formed. We have become more fully integrated with a true group culture. And, although some of our physicians are involved with teaching and research, our core mission is low-cost, high-quality patient care.

Calling Dr. Fine
ConvergenceRI also reached out to Dr. Michael Fine, the former director of the R.I. Department of Health, who said that he was speaking as a private individual.

The issues that link the sale of Memorial Hospital and the creation of Brown Physicians, Inc., according to Fine, is the effort to preserve the health care delivery system as a hospital-based delivery system.

“There is no evidence that the number and location of hospitals has any impact on the public’s health,” Fine said.

There are about 50 beds being filled in Pawtucket at Memorial [on a daily basis], Fine continued, which translates into some 240 empty beds.

“I haven’t noticed we have been overwhelmed by epidemics that are killing Rhode Islanders because there are 241 unfilled hospital beds at Memorial,” Fine said, in a sardonic tone. “Because hospitals don’t have much impact on the public’s health.”

The problem with what he termed the hospital-based approach to health care delivery, Fine continued, is that “you’ve increased costs, but you haven’t changed outcomes one bit.”

In contrast, Fine argued, when you look at increasing one number – the number of primary care physicians per 10,000 residents, “The costs come down and the outcomes improve.”

“That’s pretty strong evidence about the direction we should go in, and we’re doing the exact opposite,” Fine said.

Most people don’t understand what’s going on, Fine continued. “The voices that get heard are the voices of paid lobbyists.”

In terms of the new Brown Physicians, Inc., Fine voiced cynicism about the outcomes that will be created as a result. “It’s a big multi-specialty group that is there to sell medical procedures, to use its market power to corral people,” he said. “It’s a good business model, if you want to increase income.”

Most of what bothers people, Fine continued, “does not require specialty interventions.” In contrast, primary care offers a competing environment where people are treated inexpensively and effectively.”

Instead of bouncing from one specialist to the next, Fine offered his vision of Neighborhood Health Stations, which he called “an integrated population health model based on improving the public’s health, not on generating income.”

“The more we spend on medical care that is unnecessary, the less money we have to spend on education, housing, public transportation and community health, Fine said, strategies that are most associated with improving outcomes in public health.


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