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The RI Hospital Merger Follies

Gov. Raimondo has pushed Lifespan and Care New England back to the merger negotiating itable

Rhode Island Gov. Gina Raimondo has stepped in to halt the takeover of a string of Rhode Island hospitals by Partners HealthCare, a Boston hospital giant. The Public’s Radio political analyst Scott MacKay says a Rhode Island solution to the hospital business will require compromises that the state’s hospital leaders have not been willing to forge. (Advance copy of commentary slated to air Monday.)

The hospital merger train was hurtling down the track to Rhode Island until Raimondo persuaded the Boston Partners chain to take a time out from their plan to take over Care New England, the Ocean State’s second largest hospital system. The governor’s action came after an aggressive campaign by Providence-based Lifespan to derail the plan, which Lifespan executives believe would lead to a one-way trip of patients and research money to the Hub.

Lifespan’s anti-Partners media campaign –which Raimondo called unfortunate –was heavy on localism and arguments about patient care and costs. But, as is the case in medic al decisions nowadays, it’s all about money and where it is spent.

Lifespan is anchored by Providence’s fine hospitals –the Miriam, Rhode Island, Hasbro and Bradley, and Newport. Care New England is linked by Kent, Women & Infants and Butler. Lifespan is much bigger than Care New England, which is facing financial challenges. The red ink got so bad at Care New England’s Pawtucket Memorial Hospital that it was shut down.

It was easy for Lifespan to summon parochial pride in its anti-partners campaign. We’re at a juncture in in Rhode Island where is often appears as if Massachusetts and Boston are set on making the nation’s smallest state a colony.

Worcester has lured The Pawtucket Red Sox to a new stadium. The Boston Globe has opened a Providence operation to compete with the state’s largest newspaper, the once-robust Providence Journal. Graduates of colleges in Rhode Island flee as soon as they get their degrees to hip and high-tech Boston. Banks that were once headquartered in Providence now call Boston home. Our top political leaders say we can only fix our schools by following policies that have proved successful in the Bay State.

Rhode Islanders have long lived in the shadow of Boston, one of the few places in the world where new ideas are conceived. Rhode Islanders  love to grouse about our insular political culture, the faltering schools, the potholed pavements.  Yet when outsiders criticize us, Rhode Island’s cranky provincialism shifts to high gear.

After Lifespan’s media blitz,  everyone from Raimondo on down echoed the plea for keeping control of Rhode Island’s hospital industry local. And the Rhode Island Foundation, known for its healthy endowment and good works,  is coordinating and paying for high-priced consultants.

But this saga is still all about money. Boston-based Partners is a behemoth; its’s $13.5 billion in annual revenue dwarfs Rhode Island’s state budget, which is a bit less than $10 billion. Care New England’s financial difficulties have been well-documented. Now Lifespan is facing red ink – it has lost more than $20 million over the last three quarters. All his despite a huge uptick in government money to insure those  who can’t afford or whose employers don’t provide private insurance. Plus, a Rhode Island economy  doing better doing better than it has in years.

You have to wonder how a state with scant population growth and about 75 percent of medical customers on some sort of government insurance –Medicaid, Medicare, the Veterans Administration—can support teaching hospitals and an Ivy League medical school.

Care New England and Lifespan have tried several times over nearly two decades  to link up. Those merger talks all failed among disputes over who would run the merged system and how the money would be divided.

Raimondo has urged the top Rhode Island hospital players to “forget about the past and focus on the future.”

Government and Brown University should have strong roles to play. Brown runs the only medical school in Rhode Island. There is no free market in hospital medicine. The government pays most of the bills and ought to have more sway in hospital management. Let’s say Care New England and Lifespan are successful this time and merge. That would create a hospital monopoly in Rhode Island that would beg for tighter regulation of costs, says Sen. Josh Miller, a Cranston Democrat who is chairman of the Health Education and Welfare Committee.

Brown, with its $4 billion endowment, is the lone private entity in this mix with deep pockets.  So the university’s support is crucial.  

This we know: If Rhode Island hospital poohbahs can’t get their act together now, Partners and its gobs of money await. Do you really want to drive by Rhode Island Hospital when it gets renamed Partners South Providence branch?

Scott MacKay’s commentary can be heard every Monday at 6:45 and 8:45 and at 5:44 in the afternoon. You can also follow his political analysis at our web site at ThePublicsRadio.org