Updated March 29 at 12:29am

Birth of new health care model?

'The day of the inpatient hospital, to me, if not over, is headed in that direction.'

By Richard Asinof
Contributing Writer
More than four years after Landmark Medical Center of Woonsocket entered receivership in June 2008, Steward Health Care of Boston, a for-profit hospital system owned by Cerberus Capital Management, a private-equity firm in New York City, appears finally on the verge of acquiring Landmark. More

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Birth of new health care model?

'The day of the inpatient hospital, to me, if not over, is headed in that direction.'

Posted:

More than four years after Landmark Medical Center of Woonsocket entered receivership in June 2008, Steward Health Care of Boston, a for-profit hospital system owned by Cerberus Capital Management, a private-equity firm in New York City, appears finally on the verge of acquiring Landmark.

A deal to conclude the sale faced an Aug. 31 deadline set by the Rhode Island attorney general’s office. Last week that deadline was extended to Sept. 30. But it is expected – by hospital executives, state regulators, insurance executives and physicians – that Steward will ultimately acquire Landmark, despite a number of unresolved conditions in the pending asset-purchase agreement.

Although the current insurance contract between Landmark and Blue Cross & Blue Shield of Rhode Island expired Aug. 1, both Steward and Blue Cross are now actively engaged in negotiating a future contract. Reaching an agreement with Blue Cross, however, is not a condition of the asset-purchase agreement.

Once the expected sale is concluded, and Landmark Medical Center becomes the Blackstone Medical Center, a for-profit entity incorporated in Delaware, it will operate within a health care delivery landscape in Rhode Island in the midst of a dramatic transformation.

The community hospital – an institution of the 20th century – is giving way to the birth of a new model of health care delivery in Rhode Island. Under the new system, consolidated hospital networks will offer patients care through an integrated health care delivery system, organized around outpatient centers, with primary care delivered by patient-centered medical homes. The changes reflect payment reforms to reward value, not volume, under health care reform. The goal of the new business model is to keep patients out of the hospital.

Beyond Steward’s courtship of Landmark, market forces have shaped this transition, according to Dennis D. Keefe, president and CEO of Care New England. “The marketplace waits for no one,” he said.

In Keefe’s view, Rhode Island is headed toward a future configuration of just two or three health care delivery systems: Lifespan, Care New England and Steward, if the for-profit hospital system completes its deal to buy Landmark Medical Center in Woonsocket.

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