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A sea of red ink is washing over Rhode Island’s two hospital chains. Lifespan reported losing $76 million in March and Care New England went into the red by $29 million. Some of this can obviously be attributed to the virus crisis, but that’s not the whole story.
Our health delivery system was a mess even before the virus hit. Lifespan acknowledged this last year when the Providence-based system imposed buyouts and an early retirement program. Now, more than 1,000 of the hospital group’s 15,000 employees are on furloughs.
It has also focused on a harsh reality: the fragility of our hospital industry, the state’s largest private employer. Lifespan, which is anchored by Rhode Island Hospital and the Miriam, the big Providence teaching hospitals, says it may lose $100 million more by the end of May.
The endowments the hospitals have built up over the years are being hammered by volatility in the financial markets. With unemployment soaring, there doesn’t seem to be light at the end of the stock market tunnel.
Federal aid has helped, but that’s just a short-term fix. The coronavirus response has also trained the spotlight on the lack of pandemic preparedness. There are heartbreaking accounts of shortages of protective equipment for doctors and nurses, a lack of ventilators and sketchy testing. The reports of nurses dressed in trash bags at an overburdened New York hospital are surreal.
But it isn’t fair to beat up the hospitals for the lack of virus prevention or equipment. Our health payment regimes don’t reward hospitals for preparing for an epidemic. They earn their money by collecting fees for high-technology procedures. Both Care New England and Lifespan have postponed lucrative elective surgeries. Those are such procedures as knee and hip replacements for patients with strong commercial insurance. Nobody knows when these surgeries can resume. Now, 70 percent of Lifespan’s patients are on public insurance, mostly Medicare and Medicaid.
Pandemics are embedded into the natural history of our species. Plagues have been with us since the beginning of recorded history, as the Bible tells us. It isn’t productive to fault hospitals for failures of the state and nation’s neglected public health systems.
But there are many at fault for where we have landed. The boards and executives of Lifespan and Care New England have failed for more than two decades to forge agreement on a merger that would give Rhode Island an integrated hospital system with the financial clout to weather downturns.
The state’s politicians have long neglected serious hospital oversight and planning. Gov. Gina Raimondo is getting high marks for her television appearances and management of the current malaise. But she and her administration have been in office for six years and she’s done very little but jawboning on forging a merger deal.
Care New England once thought its savior was a combination with Partners, the huge Boston hospital system. That plan has been on hold for more than a year out of fear that it would shift patients and money to Massahusetts.
Behind the scenes, health experts are saying Rhode Island can only control its own destiny by having one system, which means a revival of merger negotiations between Care New England and Lifespan. The turf fights must cease. It’s a fact that some jobs will be lost in a combination, particularly in management and financial functions. That would be a short term downside. In the long run, a merger should mean a leaner, more sustainable system that would be better for the state.
The government has a role here. With about seven of every $10 spent on hospital care coming from taxpayers, the governor and General Assembly could be advocating for the public, rather than bowing to the whims of hospital executives and their toady boards.
Dr. Michael Fine, former state health director, says the pandemic should spur a merger. Yet, he isn’t convinced it will. Says Fine, “I never underestimate the capacity of private profit fueled by public money to rear its ugly head.”
