Change remains the constant

INCREASINGLY COMMON OCCURRENCE: The 2013 partnership of Care New England and The Providence Center was only one of many such agreements in the region in recent history, as consolidation takes hold of the health care sector. Pictured at the time, seated, from left, Dennis Keefe, president and CEO, Care New England; Dale K. Klatzker, president and CEO, The Providence Center; standing, from left, Walter Dias, COO, Butler Hospital; Dr. Patricia Recupero, president and CEO, Butler Hospital; and Owen Heleen, chief strategy officer, The Providence Center. / COURTESY CARE NEW ENGLAND AND THE PROVIDENCE CENTER
INCREASINGLY COMMON OCCURRENCE: The 2013 partnership of Care New England and The Providence Center was only one of many such agreements in the region in recent history, as consolidation takes hold of the health care sector. Pictured at the time, seated, from left, Dennis Keefe, president and CEO, Care New England; Dale K. Klatzker, president and CEO, The Providence Center; standing, from left, Walter Dias, COO, Butler Hospital; Dr. Patricia Recupero, president and CEO, Butler Hospital; and Owen Heleen, chief strategy officer, The Providence Center. / COURTESY CARE NEW ENGLAND AND THE PROVIDENCE CENTER

Editor’s note: In celebration of Providence Business News’ 30th anniversary, staff writers and contributors examined the stories and trends that defined the region’s business scene for the period.
The theme of Providence Business News’ 25th Anniversary story on the region’s health care scene was change, and that lens is still the one to use when reviewing the trends in Rhode Island and its environs. Relatively recent changes – creating HealthSource RI, merging hospitals and electing Gov. Gina M. Raimondo among them – have had the most impact on the region’s ever-evolving health care scene.

In 2011, Gov. Lincoln D. Chafee issued an executive order to establish the Health Benefits Exchange (later named HealthSource RI), one of a number of changes that the Affordable Care Act enabled.

Rhode Island, the first state to receive the second round of health-exchange-development federal funds, soon lagged behind in implementation. Only after six states, including Connecticut and Massachusetts, got conditional approval to operate their state-run health exchanges did Rhode Island act. Under HealthSource Executive Director Christine C. Ferguson’s oversight, the state filed its application two days before the deadline, raising concerns.

“We have some concerns that all such large projects are often subject to missing aggressive deadlines,” Kate Kennedy, Rhode Island Business Group on Health’s interim executive director, said early in 2013. “We are also concerned about the ongoing funding as a self-sustaining entity.”

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The Rhode Island Public Expenditure Council had questions, too. One year after HealthSource’s October 2013 launch, a RIPEC report asked if it was appropriate for Rhode Island to run its own exchange.

On Jan. 1, 2017, when the state can rely no longer on federal funding, HealthSource’s annual budget is expected to be $11.2 million. For Rhode Island’s fiscal 2016, HealthSource’s enacted budget was approximately $30.9 million – $24.7 million in federal funds and $6.2 million from assessments and a general revenue appropriation, said a HealthSource spokesperson, who expects the exchange to come in under budget at fiscal year’s end.

Some two years after taking over HealthSource, Ferguson was out, replaced by Raimondo’s nominee, Anya Rader Wallack, who left in November 2015 to become the state’s Medicaid director. Zachary Sherman, a member of the original team hired to create HealthSource, was named director in March 2016.

Official expectations that 70,000 to 100,000 Rhode Islanders would be purchasing health insurance through HealthSource by the end of 2014 were overly optimistic, but as of April 4, 2016, 35,588 had purchased insurance on the exchange In addition, 4,221 people were covered by insurance purchased through the small-business portal of HealthSource.

There’s a good news/bad news dynamic to the state’s health care systems. Financial-technology company SmartAsset ranked Rhode Island eighth best in the nation for health care access, with nearly 93 percent of the state’s population insured. However, $328, the average monthly cost for health insurance through HealthSource, is the nation’s seventh highest.

“The landscape of hospitals … is changing. With the trend toward pushing care to [community-based] settings … Rhode Island hospitals will have to adapt,” the R.I. attorney general’s office wrote in approving the Connecticut’s Lawrence + Memorial Hospital’s 2014 purchase of Westerly Hospital, rescuing it from bankruptcy.

In 2013, Lifespan and Care New England both affiliated with community mental health service providers, Gateway Healthcare and The Providence Center, respectively, and Memorial Hospital became part of Care New England.

In 2014, a new for-profit entity, Prospect CharterCare LLC, acquired Roger Williams Medical Center, St. Joseph Health Center clinics, Fatima Hospital and Elmhurst Extended Care. Of that acquisition, Dr. Michael Fine, then R.I. Department of Health director, said, “I hope … these approvals … will strengthen the fiscal condition of these valued hospitals.”

Some cross-border collaborations succeed; some do not. In 2013, South County Hospital “flirted” with suitors – including Southcoast Health System in Massachusetts, Lifespan and Care New England – before exclusively “dating” Southcoast. No marriage ensued; the hospital cited continuing painful realities of “declining payments … the shift from fee-for-service payment to different forms of global payment and consolidation of hospitals into larger systems.”

However, at the end of 2015, Southcoast and Care New England announced they were exploring affiliation, with spring 2016 the expected completion of the deal (pending regulatory approval).

In September 2015, Rhode Island Hospital reported planned job reductions that would result in savings equivalent to 100 full-time positions. In early 2016, CNE proposed restructuring for Memorial that included moving its Birthing Center to another hospital, creating community and staff protests.

Dennis Keefe, Care New England president and CEO, said, “Continuing to invest in Memorial as it is currently structured and not rightsizing our staffing level would be fiscally irresponsible.”

A collaborative skills-gap study, prepared in 2014 by some members of the Governor’s Workforce Board’s Healthcare Industry Partnership, anticipates a 16.2 percent growth – representing nearly 13,000 new jobs – in Rhode Island’s health care industry between 2010 and 2020. Perhaps that’s why nearly all of the state’s colleges and universities have introduced new health-related degrees and programs in recent years. With these new offerings, the question remains: Will students seek – and find – meaningful employment here? Only time will tell. •

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