Messaging the high cost of healthcare in RI – Richard Asinof

by Richard Asinof, ConvergenceRI, contributing writer

Lifespan sure got a lot of mileage with the news release it sent out on Thursday, Sept. 15, featuring quotes from David Kirshner, Lifespan’s executive vice president and chief financial officer, reframing the news that state’s largest hospital system has sustained both operating losses of $69.5 million and net losses of $142 million, for the nine-month period ending on June 30.

To hear Kirshner tell his tale of woe, “While we continue to prioritize investments in the resources that allow us to offer excellent care, the health care system in Rhode Island is in crisis.” To quote WPRO’s intrepid new reporter, Steve Klamkin, “Really?”

Talk about the hitting the trifecta in having packaged content from a news release reprinted as news.

• Kirshner’s self-serving quote was featured in a story in The Boston Globe, written by reporter Alexsa Gagosz, on Thursday, Sept. 15.

• That very same exact quote was featured in Item 14 in WPRI’s Ted Nesi’s weekly column, “Nesi Notes,” published on Saturday morning, Sept. 17.

• And yes, shazam, you guessed it: that very same exact quote was featured in The Public Radio’s Ian Donnis’ column, “TGIF: Rhode Island politics roundup for Sept. 16, 2022.”

What’s wrong with this picture?
After reading The Boston Globe story by Gagosz published online, ConvergenceRI immediately reached out to Kathleen Hart, Director of Lifespan Public Relations, asking her to send a copy of the news release – as well as an investor presentation that was shared with the Globe’s reporter, prepared by Alvarez & Marsal, a New York-based consulting firm, that had conducted a financial stress test for Lifespan in August.

Despite an email sent to Hart on Thursday evening, and five follow-up phone calls made to to Hart on Friday, ConvergenceRI never heard back from her.

Of course, ConvergenceRI was not surprised, because apparently Lifespan has a long-standing corporate policy of not responding to emails and phone calls from ConvergenceRI. ConvergenceRI had been hopeful that with the change in leadership and the departure of Dr. Tim Babineau as the Lifespan President and CEO, there would be a thaw in the arrogant policies of the communications department. No such luck, apparently.

The story not told, reported on, or explored
The hiring of Alvarez & Marsal as business consultants to manage the financial stress test for the Lifespan health system raised some unanswered questions about how business consultants have been utilized by Lifespan.

First, the state of Rhode Island has paid Alvarez & Marsal approximately $54 million since Jan. 1, 2020, for vaccination, testing, and financial support related to the COVID-19 pandemic, according to Derek Gomes at the R.I. Department of Administration.

All costs were paid by federal funds – a combination of FEMA reimbursement, direct awards, and stimulus dollars made available under the CARES Act and the American Rescue Plan Act, according to Gomes.

“The pandemic forced governments to create and run complex systems, including testing and vaccine administration,” Gomes said, explaining the expenditures. To meet the unprecedented demands presented by the pandemic, Gomes continued, “the State contracted with Alvarez & Marsal to assist in the state’s vaccination campaign, ensure Rhode Island met its ambitious goals, and maximize the value of every dollar in federal aid.”

The services for vaccination ended in March of 2022, and the testing services ending in May of 2022, according to Gomes. The financial support contract is going through a phased ramp down and is currently anticipated to end in December of 2022.

Translated, Alvarez & Marsal received on average $18 million a year for three years, paid with federal funds. That is a hefty chunk of change flowing into the pockets of the business consultant.

The questions to ask Lifespan: How much money was Alvarez & Marsal being paid to conduct the financial stress test for the state’s largest health system? What were their qualifications to be awarded the job?

The predictable reaction on Twitter
Of course, the reaction on Twitter to the news that Lifespan was in financial distress, according to the Kirshner’s self-serving quote from the news release that was reprinted by Ted Nesi, Ian Donnis and Alexa Gagosz, all excellent reporters, was somewhat predictable, with finger pointing by some who blamed R.I. Attorney General Peter Neronha for shooting down the proposed merger between Care New England and Lifespan.

The problem, however, as Attorney General Neronha made clear in his reasoning for rejecting the merger, was the arrogance of the two hospital systems’ refusal to share their plans about what they intended to do.

Here is what Attorney General Neronha said, as reported by ConvergenceRI: Neronha demolished the arguments put forth by proponents of the merger, in convincing fashion, calling bullshit on the failure by Care New England and Lifespan to produce an actual integration plan – only a promise to do so once the merger had been approved.

“The parties had been, frankly, unwilling or unable to describe with any precision how they intended to integrate these two [health] systems and deliver on the benefits they promised,” Attorney General Neronha told the assembled news media. “What they wanted this office to do, under the Hospital Conversions Act, was to make a decision [approving the merger], and let them figure it out later [how they were going to make it work]. That is rubber-stamping a transaction. And, that is something that this office, as long as I am here, will not do.”

Attorney General Neronha shared his great frustration that, after months of requesting an integration plan for the merger – including a personal request he made directly to the Dr. James Fanale, president and CEO of Care New England, and to Dr. Timothy Babineau, president and CEO of Lifespan, what was received was not an integration plan, but a promise to create such a plan sometime in the future in a document known as the Chartis Report. “Just read the first line,” Neronha said, which began: “The parties will develop…”

Neronha voiced his disappointment at what he deemed the lack of response by the two health systems. “What is the plan? What are the costs? Can you pay for it? Because, if I don’t know those things, I can’t weigh it against the potential harms.”

Neronha then rattled off many of the questions that remained unanswered: “Do the parties have a credible plan to effectuate the merger? Can they integrate these two systems? And can they deliver on their promised benefits. Can they do it? Do they have a plan to do it? What is it going to look like? Where is it going to be? Who is it going to employ? Who is it not going to employ? Who is going to lead it? What kind of care is it going to provide? Where is it going to provide it? What is going to be new? Where are those new services going to be?”

Neronha said he could not approve a transaction if he didn’t know what it is. “I can’t approve a transaction if I don’t know what it is. I can’t approve something if you don’t tell me what the plan is.” Without a detailed plan, Neronha continued, it was difficult to answer the question: Did the combined system have the financial wherewithal to deliver on any promised benefits?

[See link below to ConvergenceRI story, “Getting to no.”]

One more thing…
Recently, Ken Barrette, the Managing Director with the Alvarez and Marsal Healthcare Industry Group in Boston, reached out to ConvergenceRI in August about the possibility of becoming a subscriber to ConvergenceRI.

After a series of email exchanges, Barette declined to become a subscriber, saying: “I am going to maintain my PBN digital/print subscription and the various other national services such as Becker’s at this time.”

The impression that ConvergenceRI got from Barrette was that his business consulting firm did not want to incur any extra expenses that would be required to secure a subscription to ConvergenceRI.

In light of the amount of money that Alvarez and Marsal received from the state of Rhode Island – approximately $54 million over three years – as well as securing what ConvergenceRI would imagine to be a lucrative contract to conduct a financial stress test for the state’s largest health care system, the unwillingness of Alvarez and Marsal to invest in a subscription to ConvergenceRI seemed a bit short-sighted.

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Richard Asinof is the founder and editor of ConvergenceRI, an online subscription newsletter offering news and analysis at the convergence of health, science, technology and innovation in Rhode Island.

To read more stories by Richard Asinof: https://rinewstoday.com/richard-asinof/