Guest MINDSETTER™ Fine: Why A Late Session Change To The Hospital Conversions Act Is Bad For RI
Tuesday, June 27, 2017
In a bill introduced two weeks ago, the legislature is rushing to modify The Hospital Conversions Act to allow the fire sale of Memorial Hospital to Prime Health Care, a for-profit company based in California with a not for profit.
Do the Memorial deal quickly, legislators are being told, or we risk losing both Memorial and Care New England, which wants to merge with Partners Health Care in Boston. A tiny change in the emergency conversion section of the hospital conversions act will likely allow both deals to go through quickly.
Four Reasons This Change is a Bad Idea
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTFirst, it is not the case that keeping Memorial open is good for the state. There is no evidence that the number or location of hospital beds has any positive impact of the public’s health, and some evidence that having too many beds is both costly and has adverse public health consequences. That’s because hospitals with empty beds work to fill those beds, and because people in hospitals unnecessarily get unusual infections and suffer the consequences of complications of too many unnecessary procedures.
Hospitals are big employers, however, which is why mayors and labor unions work so hard to keep them open. But hospitals are funded with public money – about 64 percent of hospital income is from Medicare and Medicaid, with that percentage rising in places like Pawtucket, which is relatively poor -- so when an unneeded hospital stays open unnecessarily, you and I, taxpayers and the people who pay health insurance premiums, are the people who foot the bill.
Memorial is licensed for 294 beds, but lately has only 30 to 50 patients a day. Prime hopes to fill the hospital again, making it the source of jobs and incomes.
But at what cost? It is worth noting that the public health hasn’t suffered from the empty beds at Memorial. But each full bed costs $2500 per bed per day. That means that if Prime succeeds, it will generate $2500 times 250 beds times 365 days per year, or a cool $228 million a year, the bulk of which will come from public money, via Medicaid and Medicare, money which should be spend on education, public housing, the environment, public transportation, and community development, which all does help to improve the public’s health. Think the budget was a problem this year? Bring Memorial back to life, and we will have another $100 to $150 million dollars to the budget deficit in three to five years.
Second, it is not the case that the sale of Care New England is the best outcome for Rhode Island either. Many people think that a merger of Care New England and Lifespan makes more sense. Many people have tried to midwife this merger, and every attempt has failed. There are roadblocks that have to do with egos and with Federal Trade Commission rules. But there are also options which have never been seriously considered, options like creating a regulatory oversight commission, which is what we do to regulate other monopolies that serve the public interest. The legislature has never itself tried to create this merger, which is likely best for the state, and a rushed merger with a powerful hospital holding company from outside Rhode Island takes away the opportunity for everyone to discuss, debate, roll up our sleeves and do what is best for the state.
Third, a rush to change the law takes away our opportunity for the public to weigh in on the oversight of hospitals and hospital systems generally. Any change in the law is likely to allow more hospital ownership by for-profit entities. I and others have argued that there is little functional difference in the behavior of for profit and not for profit hospitals in Rhode Island, but that doesn’t mean a vigorous debate about the role of non and -for profits wouldn’t serve our public policy interests. If non-profits are acting badly, why don’t we change the rules about how they function, and make changes like requiring their boards to be publically appointed or elected, and restrict the salaries of executives who run these organizations. If we allow for-profits to run these mostly publically funded institutions, why don’t we make their oversight more robust, so we make sure public money is spent to create public benefits instead of being drained away as private profit, by requiring for-profit hospitals to more actively pursue activities that promote the public health, and reduce unnecessary hospital utilization and its attendant costs?
Finally, any last minute legislation dishonors all of us, and disrespects our democracy. Health policy decisions impact our health and our wealth. We need a vigorous public debate about what our health care system should look like, about who is served and how we pay for what we get, and about how to make health care effective and affordable. Back room deals made by the smart money and the good old boys in the interest of the few haven’t served us well in the past, and certainly don’t promise to deliver much now, outside of more cost and more chaos. We can and must be and do better than that.
Dr. Michael Fine served as the Director of the Rhode Island Department of Health from 2011 to 2015.
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