Delivery of Care

Show me the data – and the money!

A new study published by the RI Foundation focused on comparing hospital and health system costs between Rhode Island, Massachusetts, and Connecticut serves as the latest salvo in the war of the words, data and dollars

Photo by Richard Asinof

Dr. Beata Nelken, MD, president and CEO of Jenks Park Pediatrics in Central Falls, receives her "Health Care Hero" award at the PBN event held on April 4, 2024, one of 16 honorees. This week, she will be part of a ribbon-cutting that will reveal a public-private partnership to address homelessness and health care in Central Falls.

By Richard Asinof
Posted 4/8/24
The release of a new study financed by the Rhode Island Foundation on health care costs for hospitals and health systems offers a snapshot of data cost trends, but does not necessarily connect the dots on what are the cost drivers of why health care is so expensive and, in turn, why the outcomes are so mediocre.
When will Rhode Island put together a cost analysis of what the COVID epidemic cost the state in terms of deaths, disabilities, and breakdown of systems of care? How does the ongoing epidemic in overdose deaths, which has morphed from opioids to poisonings from illicit drug streams, magnify the shortcomings of the behavioral health system in Rhode Island? What new kinds of regulation are needed to control the use of prior authorization as a Band-Aid on utilization by insurers? Will the General Assembly agree to increase the Medicaid rates for providers in the FY 2025 budget? How do the voices of patients, the “victims” of the exorbitant increases in health care costs, get heard? Would the Rhode Island Foundation be willing to underwrite and support the creation of a media platform in Rhode Island owned by a team of black and brown women?
As a patient, I am continually perplexed by my inability to navigate the health system in Rhode Island. It turns out that the state plans to orchestrate the reduction of my monthly Social Security payments, claiming falsely that I have been enrolled in a Medicaid program for the last seven years, without my knowledge. Is that fraud? A health care provider recommended an unnecessary test that resulted in the total disruption of my body’s biochemistry, putting my ongoing health and healing from a recent surgery at risk. When will the provider figure out that they need to apologize for their bad behavior and make amends?
As a reporter with five decades of a lived experience, I have grown hardened and inured, if that is the right phrasing, to the bad behavior by some elected officials and corporate entities. I no longer take offense or get stressed out when public relations flacks do not return my phone calls and emails.
However, in health care, the costs not quantified by the current data trends report truly require a more thoughtful approach, I believe. What happens to patients who are denied care? Are they resilient, or do they become beaten down by the willful neglect? What are the health outcomes when patients cannot gain access to a primary care provider for more than a year? Is that reflected in the overflow of emergency rooms? What are the additional costs to the health care system? How is that reflected in the mental health and behavioral health of patients denied care? What is the racial component involved in the denial of care?

PROVIDENCE – The conversations over rising health care costs keep getting lost and found and lost again in the growing traffic jam around data trends and costs.

The latest salvo fired is a report commissioned by the Rhode Island Foundation, conducted by Manatt, released on Monday, April 1, entitled: “Financial Structure and Performance of Rhode Island’s Hospitals and Health Systems Study.”

In his introduction to the study, David Cicilline, president and CEO of the Rhode Island Foundation, wrote: “Ensuring accessible and high-quality health care for Rhode Islanders requires a stable delivery system. Given that, there is a need to establish and communicate baseline information about the financial structure and performance of that system, of which the state’s hospitals and health systems are a key component. While various sources of data are available, the information ecosystem is fragmented, and these sources are rarely synthesized.”

Future work, Cicilline continued, needs to fall under the auspices of state government. “The regular collection and dissemination of this information is, ultimately, a core responsibility of state government.” The problem, Ciclline said, is that previous work “pointed to structural challenges and a lack of sufficient investment that was limiting the state’s ability to carry out this role.”

Translated, the Foundation was now stepping into the gap left by the huge holes in the state’s own capabilities to regulate health care costs. The study, which was said to be using publicly available data, was funded by Care New England, Lifespan, South County Health and Blue Cross and Blue Shield of RI.

Competing data trends.  
It is one of five competing analyses that are attempting to define the data around health care costs:

  •    R.I. Attorney General Peter Neronha and his legal team are preparing a solution to the current health care crisis.  [See link below to ConvergenceRI story, “AG Neronha weighs in on the future of health care.”]
  •    Gov. Dan McKee recently established by executive order what he is calling an “Executive Planning Cabinet” to develop a future health care strategy for Rhode Island.
  •    The Care Transformation Collaborative RI’s task force on Primary Care has developed a strategic road map to transform the delivery of primary care in Rhode Island.
  •     Senate President Dominick Ruggerio has introduced a package of 25 bills to reform the delivery of health care in Rhode Island, which includes an expansion of the Office of the Health Insurance Commissioner's responsibilities around rate analysis determinations. [See link below to ConvergenceRI story, “When it comes to health car, the Senate President delivers.”]

Of course, none of these conversations and studies is occurring in a vacuum, even if they are occurring in silos – without any planned point of convergence. The ongoing crisis in Massachusetts with the financial collapse of Steward Health Care promises to swamp Rhode Island with a tsunami of unintended consequences, including the plan to sell Steward’s physician practices to Optum, a for-profit division of UnitedHealthcare.

[Editor’s Note: Optum currently manages approximately 95 percent of all the behavioral health services for Medicaid members receiving care through the privatized Managed Care Organizations.]

Worse, one of the major causes of the health care crisis in Rhode Island – the failure by the General Assembly to raise Medicaid rates for providers – faces an uncertain future, with the Governor proposing increases over three years, the House apparently proposing increases over two years, and community agencies urging legislators to act now and put the raises in the FY 2025 budget. All the data trends and studies and analyses don’t mean a thing if the General Assembly refuses to act, in ConvergenceRI’s opinion.

State Senator Lou DiPalma, addressing the Medicaid rates issue on X, tweeted out: “Addressing Medicaid rates is paramount. As of March, RI has 336,177 individuals on full Medicaid, approx. 32% of our population. The time to act is now, not tomorrow. Full stop.”

Further, there is no discussion in the study related to the problematic impact that private equity ownership has played in the ongoing financial instability of two Rhode Island hospitals, Roger Williams Medical Center and Our Lady of Fatima. Both hospitals are now undergoing a regulatory review of plans to sell the hospitals to the Centurion Foundation.

What is the value of the study  
ConvergenceRI sought out a number of health care experts to provide an analysis of the new study. A follow-up story in next week’s edition will feature in-depth responses from R.I. Attorney General Peter Neronha and OHIC Commissioner Cory King. In addition, Convergence will report on a health care conference sponsored by Providence Business News in which the Rhode Island Foundation study emerged as a frequent topic within the conversation.

Anya Rader-Wallack:  
What is the value of the study? “The study provides a valid baseline for tracking health care costs and cost growth over time. It also includes helpful benchmarking against neighboring states and health care markets. The past few years were tough ones to be in the hospital business, and this study shows that it may have been even tougher in Rhode Island than in some other states. It’s also interesting that Rhode Island has lower utilization than neighboring states, despite having a similar bed supply.

Does it establish common language re costs and metrics? “Yes, to a degree, but it isn’t terribly accessible to non-experts.”[See links below: Mass includes summary statements that make it easier to digest the data.]

What to explore further? “It would be interesting to see the data at the individual hospital level, though that is probably not possible with publicly-available sources. Statewide averages can mask wide variations across hospitals and health systems. Massachusetts collects a broader array of data directly from hospitals and physician groups. [See links below.] It would be nice to see some of the MA-reported measures for Rhode Island providers, such as age of plant, to understand whether negative margins are having negative impacts on facilities. Also, I prefer the metrics that combine price and utilization, such as total cost per enrollee. I don’t find the price data all that illuminating.”

Also below is a link to a similar VT report that is interesting because it cuts across all payers with some of the rolled-up metrics, so you get a better sense of overall provider revenues.”

R.I. Senate President Dominick Ruggerio: “We have looked forward to receiving this report.Our policy team will be diligently reviewing it in the coming days, and we hope that it can further inform the Senate as we move our Rhode Island HEALTH Initiatives forward.”

Rich Salit, Blue Cross and Blue Shield of Rhode Island: “We appreciate the collaboration with the hospitals, under the leadership of the Rhode Island Foundation, to undertake this important work of establishing a common data set. Our state’s health care system, like many across the nation, is facing critical challenges. A shared set of facts is foundational to understanding the issues and developing solutions.

“The report confirms that reimbursement from private insurers for hospital services is appropriately aligned with our neighboring states based on Medicare reimbursement. This is a well-established basis for health care reimbursement because it adjusts for differences in cost of living. The report also highlights the disproportionately heavy reliance on government funding in Rhode Island, with 70 percent of all services reimbursed by either Medicare or Medicaid, underscoring the need to increase inadequate Medicaid reimbursement rates to ensure the long-term sustainability of health care providers.

“It’s important to note that the report analyzes a little less than half of health care spending in Rhode Island. As a next step, it’s critical to extend this analytical approach to the other half of health care spending in the state, namely physician services and pharmacy costs. This will help us understand where our health care dollars are being spent and develop policies that achieve our shared goals of ensuring that health care, especially primary care, remains accessible and affordable and that we continue to improve quality and health equity.”

What the RI Foundation said  
ConvergenceRI also reached out to Zach Nieder, senior strategic initiative officer, to pose a series of in-depth questions about the study. Here is the interview, conducted on Friday, April 5, via phone.

ConvergenceRI: Is there a desire to create a data dashboard on medical costs in Rhode Island, as a follow up to the study?  
NIEDER: I think, from the Foundation’s perspective, there is value in, maybe this is not exactly what a larger group of stakeholders might choose as the select indicators, but there is value in this type of financial performance transparency information being done regularly.

And that, in other states, [such work] is actively being done by state government. You have the Center for Health Information and Analysis in Massachusetts, or the Office of Health Strategies in Connecticut that collects a lot of the same data that we collected in this study.

I do think that there is value in that being an outcome.  This may be seen as a model largely for what should be done fairly regularly in the state.

ConvergenceRI: How does this work differ from the work that is being done under the direction of Cory King and OHIC in terms of looking at the costs overall for Rhode Island? Last year OHIC did an analysis of the entire health care system spend. Are you familiar with that?  
NIEDER: Yes. I think one of the goals of this study was not to duplicate existing work. This work fits neatly within the analysis that they are doing but does not duplicate it. Again, we are not saying that what we are putting out is the be-all and end-all of what this transparency should look like. In fact, I think it should be, in many ways, an amalgamation, looking at what other sources of data are already done.

I think what we were trying to do in some ways is to demonstrate that there is a lot of data out there that sits in different places, and that there is value in having it in one place.

Again, this is publicly available data. It’s not like we are turning over something brand new. We were just pulling it all together in one place. I think that, ultimately, what it will take, and essentially, in the direction that is new, the health care planning cabinet that is getting underway. Now. we need to figure out: What are all the different data sources out there? And, How do we create a system by which the data is collected regularly? 

ConvergenceRI: What do you see as the ongoing role that the Rhode Island Foundation perceives that it will play in this new data trends creation around health care costs? Will this become a permanent role that the Foundation will play?  
NIEDER: No, I don’t think so. I think again, this was more about demonstrating a potential model. Health system reform is under our “Health and Strategic Lives” strategy at the Foundation.  This is core to it. We want to be as engaged and involved and as helpful as we can be. This role should be ultimately, the role of state government.

ConvergenceRI: How will the Rhode Island Foundation participate – and have you been invited to participate – in the health planning executive cabinet being set up by the McKee administration.  
NIEDER: We are not on the Cabinet. They are setting up an advisory committee, I forget the exact name; independent advisory committee, I believe, is the name of it, and we are represented on that, yes.

ConvergenceRI: Who is your representative on that committee? Is that you?  
NIEDER: That is David Cicilline.

ConvergenceRI:  I wanted to make sure that I understood your answer. You are part of that independent advisory committee.  
NIEDER: I don’t want to misspeak those words. I will double-check with my colleagues in state government. But, the cabinet itself is just cabinet level leaders within Gov. McKee's cabinet. And then, under the existing statute, it would suggest forming an independent advisory committee to inform the work of the cabinet.

I think it is a fairly broad stakeholder group that they are organizing, and obviously, any of those meetings will be public as well, and that is where the Foundation is represented.

In part, because of our long-term health planning committee as well, they wanted to make sure that there were lots of other groups meeting across the state, and they wanted to make sure that those groups are represented on this independent advisory committee.

ConvergenceRI: What role, if any, did Al Kurose, the chair of the Foundation, play in assisting the work of the Manatt consulting group and in the preparation of this study?  
NIEDER: He was not involved.

ConvergenceRI: To any degree?    
NIEDER: No, no.

ConvergenceRI: One of the things that seemed to be missing from the analysis, and you can correct me if I am wrong, was that there was no real analysis about how utilization changed because of COVID-19.  
NIEDER: We tried to make it as clear as possible that the impact of COVID 19 on utilization and other things, such as hospital financial trends as well, we put that right up front in a data limitation slide, we certainly agree with you that utilization was heavily impacted by COVID. The other limitation around the utilization data was that it was inpatient and emergency utilization data. It was not outpatient utilization data, which we applied as well.

But, I do think it sort of gets to that earlier point we were discussing: The value of this work is in its repetition. We have the most recent publicly held data that we can include in this study.

A year from now, there will be new publicly held data that may reflect what changes have [occurred] under the long tail of COVID and, as we continue to move forward, I think it reinforces the need that this as a one-off has some value, but this model for long-term data collection and transparency has much more value.

ConvergenceRI: Would you agree that I am accurate in my observation that I didn’t see any slides that addressed utilization and COVID?  
NIEDER: We do have data on utilization in the deck. We covered the time period in which COVID was impacting the delivery system, so by that, I think, you can say that there is utilization data that reflects the impacts of COVID within the study.

ConvergenceRI: But, it was not separated out to any degree; there was no special acknowledgement of the role COVID played in this.  
NIEDER: We made sort of a blanket statement at the beginning of the study, saying that many of the data points, particularly those that you are talking about, really the 2022 time period, were significantly impacted by COVID. So, I think we made the attempt not on each individual slide, but to have a blanket statement at the beginning of the deck, saying we fully realize that the state was impacted by COVID.

ConvergenceRI: Once again, it may be an overall qualifier, but I didn’t necessarily see it on a slide, per se. There was a lot of material to take in, and I wanted to be accurate.  
NIEDER: I think it is accurate to say, that, on individual slides, on utilization data points, we did not call out specifically that this data would be impacted by COVID. We had a slide at the beginning in a data limitations slide, maybe it was the first bullet on the data limitations slide, that specifically state the impacts of COVID on all of the data.

[Editor’s Note: In the 139-page study, on Page 15, as the third bullet point in the slide  “Data Limitations,” it says: “Impact of the COVID-19 Pandemic: The COVID-19 Pandemic between 2020-2022 introduced several “shocks” to the health care system that make it difficult to establish consistent and meaningful data trends (e.g., sharp declines in utilization of non-COVID -19 related services.”]

ConvergenceRI: One of the biggest cost drivers on health care costs of the past six-seven years, according to the data I have seen, has been pharmacy costs. Once again, correct me if I am wrong, I did not see that addressed necessarily in the slides.    
NIEDER: No, you did not. And, it was one of the points that we tried to make at the end, about where there are gaps that the study did not include. There are several categories within the perspective of the depth of the study, and pharmacy costs, this slice of the health care system, but also segments of the health care system that the study does not cover. There are certainly areas for further data collection. And that is one of them.

ConvergenceRI: Moving forward, there now appear to be, by my count, four or five different data trends being developed. Yours is one of them. There is also a plan being developed by the Attorney General’s office, there is the Executive Planning Cabinet, that’s number three; there’s a strategic road map for primary care being  developed by the Care Transformation Collaborative stakeholder group, with it’s own set of data, that’s four. How do those all fit together? If at all, do they fit together? How do they converge? I like that term, converge.  
NIEDER: [laughing] It’s a great question. I think that each of those – I know a little bit less about the Attorney General's ongoing work, but I would say, in terms of what the CDC’s work is, and I think that also connects to the work that is happening within EOHHS, in terms of their linking licensure data. There is a lot of different data, a fully agree with you.

I think many of them don’t overlap that much. To your other point, to the cabinet, and the work that they are doing, I think that is the opportunity to pull all of this work together and to figure out, how do you move forward with a structure of data collection and transparency, getting the work out there in a way that removes the risks of duplication of work.

[Editor’s Note: Coming next week, in convergenceRI. The conversation continues, with the responses from the Attorney General, from the OHIC Commissioner, and a discussion of the PBN health summit.]

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