Updated September 1 at 7:01pm

Can parallel health systems merge?

By Richard Asinof
Contributing Writer
Amid the push and pull of developing and implementing new models for payment and delivery of health care, two parallel systems have emerged in Rhode Island – large, consolidated hospital networks and community-based health centers. As the state moves into the new world of health care reform, their points of convergence are still unmapped and potential opportunities for collaboration largely untapped.

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HEALTH CARE

Can parallel health systems merge?

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Amid the push and pull of developing and implementing new models for payment and delivery of health care, two parallel systems have emerged in Rhode Island – large, consolidated hospital networks and community-based health centers. As the state moves into the new world of health care reform, their points of convergence are still unmapped and potential opportunities for collaboration largely untapped.

For acute-care community hospitals in Rhode Island, the story has been one of financial struggle, declining revenue, receivership, pending sales and consolidation, as they transition from the “hospital as hotel” business model toward a global-payment model.

Lifespan, the state’s largest hospital network and largest private employer, recently announced plans to restructure its workforce, laying off more than 100 employees and freezing 500 open positions, in an effort to cut up to $150 million in operating expenses. Lifespan blamed the falling revenue in part on the changes created by health care reform and reductions in Medicare and Medicaid payments, according to spokeswoman Gail Carvelli.

At the same time, Lifespan has also increased its network consolidation in the marketplace. It opened its own pharmacy at Rhode Island Hospital. It received state approval to partner with Gateway Healthcare, the state’s largest community health provider. It partnered with OB-GYN Associates, one of the region’s largest obstetric and gynecological practices. It also moved ahead with plans to invest more than $100 million in rebuilding its health IT infrastructure to create a platform of interoperability across all of its hospitals, with the goal of moving its care to be more “patient-centric,” according to Dr. Timothy J. Babineau, Lifespan’s president and CEO.

The goal of health care reform is not just to enable patients to have access to insurance, but to help them have affordable health care options, says Jane A. Hayward, president and CEO of the Rhode Island Health Center Association.

“Not all care can be provided in the community, and not all care should be provided in a hospital,” Hayward told Providence Business News. “As we continue to build out a new system, everyone may have a different role to play.”

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