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Matchmaker, matchmaker, find me a find, catch me a catch – Hospital Mergers in RI
Gov. Gina Raimondo steps into the role of yenta to try to broker a marriage between Lifespan, Care New England, and Brown University, in order to pursue a vision of a Camelot-like Rhode Island academic medical enterprise. by Richard Asinof
Matchmaker, matchmaker, find me a find, catch me a catch
The news that Gov. Gina Raimondo has decided to play yenta once again and try to arrange a brokered marriage between Lifespan, Care New England and Brown University, was released in a carefully orchestrated series of managed media events, with the news media mostly barking, arf arf arf, in response, right on cue.
First, there was the news release sent out at 11:17 a.m. on Tuesday morning, June 4, announcing the move to push the pause button on the merger between Care New England and Brigham and Women’s Hospital, a division of Partners Healthcare in Boston.
Perhaps the most intriguing quote in the news release came from Dr. Anne Klibanski, interim president and CEO at Partners Health Care, saying that in order to give this new effort the best possible chance for success, they were withdrawing their application to acquire Care New England. Klibanski added, in a telling turn of phrase: “We look forward to reengaging at the appropriate time – especially with a fully integrated local system.”
Translated, does that mean a fully integrated local system might be fodder for future acquisition by Partners? Good question.
At a subsequent news briefing, Raimondo repeatedly dropped hints that the endgame was to bring Care New England, Lifespan and Brown together as one integrated entity – and then perhaps have that entity merge with Partners.
“Let me say, Partners has been terrific to work with,” Raimondo said. “They support what’s happening here. They are supportive of this. I think they remain interested in Rhode Island; they’ve told me that. And, I know they would be interested in partnering with the combined system.”
Raimondo continued: “They are doing the right thing and giving us a little space to see if we can first get integrated.”
It is unclear if the news media actually paid attention to what was being said, because most of the reporting appeared to gloss over that important nuance.
Unpublicized, select briefing
After the news release was issued, there was an unpublicized briefing held by Raimondo, to which a select group of the news media had been invited [but not ConvergenceRI, who had been tipped off], held in the State Room at the State House at 1 p.m.
For the record, Raimondo did not appear to be happy to see ConvergenceRI in the front row of reporters, asking questions.
[For nearly four years, the Governor has ignored repeated requests by ConvergenceRI to interview her, one-on-one, with Raimondo having broken her spoken vow, “Yes, I will,” despite two in-person handshakes sealing the verbal commitment. And, a note to Jennifer Bogdan, the governor’s communications director: The renewed request for an interview with the Governor has been awaiting a response from you for five months, without an answer. What is the Governor afraid of?]
Orchestrated praise
Then, following the news briefing, another news release was issued Tuesday afternoon at 2:15 p.m., under the heading, “What They’re Saying,” purporting to show that the Governor’s announcement had been met “with praise from government, health and community leaders across the state.”
The problem was: all the quotes had been solicited in advance of the announcement, not afterward – from Sen. Sheldon Whitehouse, former R.I. Health Insurance Commissioner Chris Koller, former director of the R.I. Department of Health Dr. Michael Fine, Rhode Island Foundation President and CEO Neil Steinberg, and Tom Giordano, the head of Partnership for Rhode Island, a CEO-driven enterprise to support the business interests of major corporate players. All of these quotes were fed to the media and then spit back out in subsequent stories. [Can you give me your paw?]
Who’s on first?
At the news briefing, Raimondo took full credit for seizing the initiative to bring all the parties back to the bargaining table for another round of marriage talks. But the veritable power behind the throne, it appeared, was Neil Steinberg, who used his philanthropic largesse to underwrite the cost, put at $200,000 by the Rhode Island Foundation, to bring in consultants to manage the renewed talks. Under the direction of Steinberg, the Rhode Island Foundation is also facilitating the effort to develop a long-term statewide health plan. [See link below to ConvergenceRI story, “If not now, when?”]
The main consultant chosen to facilitate the talks, Chartis Group, is headquartered in Chicago, Ill. The selection of Chartis to serve as consultant was apparently agreed to by all of the parties involved, according to sources.
Pay attention here: The co-founder and CEO of the Chartis Group is Ken Graboys, someone with strong ties to Rhode Island. His father was the late George Graboys, the former CEO of Citizens Bank and the former CEO of the Rhode Island Foundation.
According to the Chartis Group website, Graboys has helped “leading academic medical centers, integrated delivery systems and health care service organizations achieve their strategic and economic imperatives.” [One of the previous acquisitions that Chartis had been involved with, according to the website, had been work with Yale New Haven and its purchase of Lawrence + Memorial hospital in New London, Conn., which had previously taken over Westerly Hospital.] It’s a small world, after all.
Exactly who will be the “clients” of the Chartis Group under the new consultancy agreement is still unclear if not muddy. Bogdan, the communications director for Raimondo, could not answer the question about who were the “clients” when asked by ConvergenceRI, following the news briefing.
Instead, Bogdan suggested posing the question to the Rhode Island Foundation, which ConvergenceRI then did.
“The Chartis Group was chosen by the Governor’s team in consultation with the organizations,” according to Steinberg. “It is our understanding that Chartis will be working directly with Care New England, Lifespan and Brown,” adding that the Governor’s office would be able to provide more details. Not so.
In addition, there are two other consulting groups who are involved, who have both done previous work for Lifespan and Care New England, according to sources.
Was it an error of omission or commission to leave out the details of the consulting arrangement and the costs of the engagement in the news release? Good question.
When asked by ConvergenceRI at the news briefing about how much the consultants were being paid, Raimondo responded with what seemed like a purposeful vagueness: “I can’t remember; I think it’s a couple of hundred thousand dollars.” Really?
Raimondo was quick, however, to stress that there was no taxpayer money involved, and that the Chartis Group had been engaged by and paid for by the Rhode Island Foundation.
Why is the question about who is the client important? A few years ago, the Rhode Island Foundation engaged with the Brookings Institution to do an analysis of Rhode Island’s future economic pathways. While the Rhode Island Foundation was said to be the client, one of the coordinators of the work being done by Brookings, Mark Muro, identified Stefan Pryor, the secretary of CommerceRI, as the actual client.
What is the timetable?
And, the exact timetable for when those who are involved at the table to complete the arranged marriage talks was equally vague, described as “a month or two,” with the hope that it would be sooner rather than later. Raimondo stressed it was time to seize the moment.
“It is in everybody’s best interest to move as fast as possible,” Raimondo said, in response to a question by a reporter about the timing, which appeared to be happening at the 11th hour. “We have some momentum, so I am going to be urging the parties to move with the momentum to decide quickly whether or not this is something we can get done.”
Based upon her conversations, people are ready now, she continued. “I don’t think they were ready six months ago; now, I think they are ready. They’ve come to me to say, they are ready. I say: we seize the moment.”
Feedback
James Beardsworth, communications director for Care New England, sounding optimistic, called the new development “a clean sheet of paper,” a development that may offer a new path forward.
However, Patrick Quinn, executive vice president of District 1199 of SEIU New England union, expressed concerns. “Any consolidation of two of the largest private sector employers in Rhode Island into one health system would likely lead to job losses and increase patient cost,” Quinn said in an emailed statement.
Peter Simon, a retired pediatrician, also voiced his concerns about what he termed “Medical Nemesis, version 2.0.”
“Just bringing the two [health systems] together creates almost a monopoly without regard to whether capacity is right-sized for the state,” Simon said. “We will be over-bedded, over-supplied, and without a plan based upon what we need. We will see utilization go up and up,” he warned.
Dr. Michael Fine, the author of the recent book, Health Care Revolt, had been quoted by the Governor’s team as being in support of the effort to create a unified academic health system in Rhode Island. In a subsequent conversation with ConvergenceRI, Fine offered kudos to the Governor for her health policy leadership that he felt had been sadly lacking for too long. But Fine also expressed concern about the need for a state regulatory body to set prices and review budgets.
“Otherwise,” Fine told ConvergenceRI, “the new entity will bleed the state dry. I think the merger [of Care New England, Lifespan and Brown into one enterprise] is a good idea – as long as it is a merger that is governed by a hospital regulatory commission that creates budgets and sets prices.”
Fine continued: “We need to create a hospital regulatory commission and a primary care trust, in order to build a health care system, not a market.”
Sen. Joshua Miller, chair of the R.I. Senate Health and Human Services Committee, also voiced concerns about the lack of regulatory oversight for such a merger, which would create a health system that controlled more than 80 percent of the state’s medical industry sector, in an interview with WPRI’s Eli Sherman.
“We might not have as robust and responsive a regulatory structure for hospitals as is necessary if so many hospitals are controlled by one entity,” Miller told Sherman. “We’re undermanned and don’t have the ability to respond as quickly as we’d need to.”
The takeaways
There were a number of significant takeaways from the Governor’s announcement, few of which were reported:
• The game plan may be to first merge Lifespan and Care New England in an integrated academic partnership with Brown, and then have the whole system acquired by Partners. All the appeals to Rhode Island chauvinism about creating a locally run, integrated health system may prove to be a smokescreen.
• The economic reality is that not only Care New England but Lifespan is reported to be hemorrhaging money, according to numerous sources. Without an infusion of capital promised by the Partners acquisition, the financial health of both systems may be in jeopardy, regardless of the promise of a locally-run health integrated health system. The bottom line is that the current business model for hospitals is not sustainable, and the focus on health care as a commodity by health systems is a significant barrier.
• The rhetoric employed by Raimondo did not seem to acknowledge the reality of health care in Rhode Island and in the nation: most care is being delivered by nurses, not by doctors, in most health care settings. Her messaging appeared to be doctor-centric, as when she said: “I’m focused on the people of Rhode Island who deserve high-quality doctors, in their community, at a cost they can afford.” The reality is that salaries, particularly for primary care doctors, are often $20,000-$30,000 more in neighboring states, such as Connecticut and Massachusetts. Future job growth in the sector is being driven by opportunities for nurses, not doctors.
• Despite the sea change in the shift in investments by the Rhode Island Foundation to focus on health outcomes, not just clinical health care, a discussion of health equity and community-based solutions to improving health outcomes did not appear to be significant part of the conversation about merging health systems.
• The use of philanthropic money to pay private consultants to manage public policy around health care decisions is a worrying trend. As was demonstrated by the UHIP fiasco, the state’s dependence upon Deloitte to build and manage a glitch-filled software system is still reverberating, with little accountability. The intervention by private consultants to manage the proposed merger of health systems, which represent two of the largest private employers in the state, would appear to undercut the regulatory authority of both the R.I. Department of Health and the R.I. Attorney General.
• Much of the concern voiced regarding the potential acquisition of Care New England by Partners involved the potential loss of jobs, the potential increased cost of care, and the potential flow of patients away from Rhode Island to Boston. The irony of the proposed merger between Care New England, Lifespan and Brown is that it may precipitate exactly the same outcomes as what was projected as fears about the potential results of a Partners acquisition: the large loss of jobs through consolidation; increased costs of care driven by an effective monopoly of one entity controlling 80 percent of the state’s health care delivery system; and the resultant exodus by patients to other competing heath systems. Be careful what you wish for.
• The academic medical research enterprise in Rhode Island is quite robust, despite worries expressed that Partners relationship with Harvard Medical School would somehow result in the loss of potential research dollars for Brown University.