Is Rhode Island’s Healthcare System Near Collapse?

Wednesday, October 18, 2017


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Is time running out for RI's healthcare system?

Here are some recent developments in the Rhode Island healthcare system:

Care New England announced on Tuesday that it is closing Memorial Hospital in Pawtucket after its deal with Prime Healthcare collapsed.

Prime Healthcare owns Landmark Hospital in Woonsocket. Presently, Prime is being investigated by the Department of Justice.

Care New England has lost $117 million combined in the past two fiscal years.

Care New England’s proposed sale to Boston-based Partners HealthCare is in question and the failure to sell off the money-losing Memorial only puts the deal at greater risk. In the past year, Memorial lost $23 million. "We agree with and support the steps that Care New England has announced today.  We look forward to continuing our due diligence process, which will now include evaluating the impact that Care New England’s new plans for Memorial will have on its overall turnaround plan," said Rich Copp, Vice President of Communications of Partners HealthCare in an email to GoLocal on Tuesday.

Lifespan -- the state’s largest healthcare group --  is trying to reverse its own financial challenges. In 2015, Lifespan lost $9.5 million. In 2016, the financial losses jumped to $29 million. 

St. Joseph Health Services pension fund went into receivership and faces a shortfall of tens of millions and over 2,700 pensioners face cuts to their pensions of potentially as much as 40 percent.

VNA of Rhode Island, one of Rhode Island’s oldest home care and hospice providers, based in Warwick, Rhode Island, announced their closure by the end of the calendar year. 

Nearly every hospital is impacted, thousands of employees are at risk, and pensions are failing.

This is all before changes to Obamacare have taken place. On Friday, President Donald Trump signed an Executive Order that directs the Department of Health and Human Services, the Treasury, and the Department of Labor to “take action to increase competition, increase choice, and increase access to lower-priced, high-quality healthcare options,” said the President before signing the document. The plan will take the first steps to expand choices and alternatives to Obamacare plans and increase competition to bring down the costs for consumers. 


The implication of Trump's actions on Rhode Island’s distressed healthcare system is unknown.

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Raimondo issued an audio clip on the Memorial Hospital closure.

Leaders Caught Off Guard?

State officials seem to be caught by the surprise news by CNE's board to close Memorial. Governor Gina Raimondo issued an audio clip to the news, but her office refused to respond to written questions.

Pawtucket Mayor Don Grebien, who is facing a slew of challenges, issued a statement that said in part, “I am extremely disappointed in this decision by Care New England to abandon our community hospital during their transactions, putting their agreement with Partners above the one with Prime Healthcare. I think closing Memorial could have been avoided, rather than giving up on an urban community and the Blackstone Valley. Our community needs are important and should not be dismissed for profit. Memorial Hospital provides access to quality care for our residents and is one of our largest employers.”

The bad news for Pawtucket was only the latest. Recently, the much-heralded Gamm Theatre announced that it was moving from Pawtucket to Warwick.

GoLocal first reported that Hasbro, which is headquartered in Pawtucket, is looking to consolidate its offices in Rhode Island into one campus, potentially in Providence. And, the proposal for a new stadium for the PawSox is now hitting some significant challenges in the legislative review process.

According to CNE, Memorial employs 827 employees — 603 full-time equivalents. The implication for Pawtucket and the Blackstone Valley is significant.

Senate President Dominick Ruggerio refused to comment. But, Speaker Nick Mattiello said, “I am disappointed to learn of the decision between Care New England and Prime Healthcare regarding Memorial Hospital. I fully anticipate a thorough review by the director of the Department of Health to follow the Certificate of Need process, which will produce a final determination.” 

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Pawtucket Mayor Don Grebien

Implication for Workers

The collapse of the deal with Prime and the decision by the Board of Directors of CNE sparked an immediate response from United Nurses and Allied Professionals General Counsel Chris Callaci.

He said in a statement on Tuesday, "We are deeply saddened by Care New England's decision to turn its back on Blackstone Valley families and the dedicated, hard-working health professionals of Memorial Hospital.” 

“Our immediate efforts will focus on assisting our members in transitioning through this difficult process and ensure that Memorial patients continue to receive the quality care that has been the hallmark of this institution for generations,” said Callaci.

The one bright note may be Prospect — owners of CharterCARE who offered to try and salvage CNE. In a statement to GoLocal, “We recognize that Care New England is now faced with difficult decisions as it looks to the future.”

“CharterCARE Health Partners, and its hospitals, stand ready as a viable and quality partner to work with CNE to preserve local access to key healthcare services and to keep healthcare jobs in Rhode Island,” said Otis Brown, Vice President for CharterCARE.

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Related Slideshow: 7 Implications and Unintended Consequences of a Care New England and Partners Merger

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Providence does not usually do well in mergers

Remember Providence Gas, Fleet Bank, and Narragansett Electric?

Big employers, deep community involvement, and significant charitable donors — all were consumed and in each case, the number of employees left in Rhode Island by the succeeding company is a fraction of the once independent venture.

To the victor goes the spoils.

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As if the Boston economy isn't good enough, and the Providence economy couldn't be more stagnant

The cityscape of Boston is littered with cranes. Boston Business Journal maps the construction projects utilizing cranes in Boston (see image) and the number of projects is staggering. 

In Providence, there few construction projects and not a crane to be seen. The last thing Providence needs is for another one of its largest employers to be merged into a Boston mega-organization. The likelihood is that jobs will be lost or consolidated to Boston - basic functions like purchasing, accounting, etc. will be lost. 

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Harvard beats Brown in Ivy League match-up

Harvard Medical School is ranked as the #1 research-based institution in America by U.S. News and World Report.

Partners Healthcare’s academic partner is Harvard.

In contrast, Care New England’s academic affiliation is with the Warren Alpert Medical School of Brown University. Brown’s best ranking is 21st for primary care - and is ranked for research way back at #31.

One of the biggest losers in the merger could be Brown's medical school.

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Care New England is RI’s 2nd largest employer, so what will It be in 2 Years?

According to the RI Department of Labor and Training, Care New England is Rhode Island’s second largest employer.

Lifespan is the largest: 12,050

Care New England: 8,500

CVS: 7,800

Cities like "Meds and Eds" (the medical and educational business segments), but Providence and all of Rhode Island is likely to lose high paid, highly educated jobs as a result of this deal.

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Care New England Continues to Struggle

Despite hopes that closing Memorial Hospital would solve the financially beleaguered Care New England's economic woes, new financial documents unveil that CNE continues to struggle.

Additionally, the pursuer - Partners HealthCare - is also making cuts. The Boston Globe unveiled the Partners is cutting about 100 of the company’s tech workers that their jobs were being outsourced to India to cut costs.

“Many of the employees have worked for Partners for several years, or even decades, and are struggling with the company’s decision. Almost all are coders — people who scour patients’ medical records to pinpoint billable services — and earn upward of $40 an hour. Coders in India earn a fraction of that amount, making overseas coding an attractive way for hospitals to cut costs,” wrote the Boston Globe.

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Can the unions battle?

Within hours of GoLocal breaking the news of the merger, the United Nurses and Allied Professionals (UNAP) President Linda McDonald, RN, released the following statement today:

"This proposed merger has the ability to impact thousands of jobs and the quality of care in Rhode Island and should be thoroughly scrutinized. Like most Rhode Islanders, we only recently learned of this proposal but expect Care New England and Partners HealthCare to be transparent in their process and begin a conversation with our union about the effect any deal would have on our members and our patients.  

Memorial Hospital provides critical care to scores of Blackstone Valley residents every year and preserving its status as a fully-functioning community hospital will be among our top priorities as this process continues to unfold. 
The onus is now on Care New England, Partners HealthCare and Prime Healthcare Services to make the details of this proposal public and to do it quickly so that workers, patients and state regulators may begin asking the appropriate questions."

The nurses represents nearly 1,400 registered nurses, CNAs, ER techs, surgical techs, orderlies, endo techs, environmental employees and ancillary staff at Kent and Memorial hospitals.  But, will they have any impact on the decisions?

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Speaking of Lifespan - will they be forced to merge with a Boston partner?

Lifespan is having its financial challenges too. While Care New England lost $53 million last year, Lifespan's losses were $40 million. The Lifespan losses were smaller proportionately to the healthcare group's overall budget and it does not have the cash crunch that Care New England was battling.

In February, Lifespan announced it had has entered into another Boston Hospital agreement. This agreement with Dana-Farber Cancer Institute is a long term agreement with the goal of advancing cancer treatment and research. Lifespan previously entered into an agreement with New England Medical Center and that deal led to years of protracted litigation to unwind. Lifespan also ran into a legal battle with Tufts Medical Center.

Will Partners' potential arrival in the market force Lifespan to affiliate?


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