Steward model would alter landscape

'Specialty care leaving the state would not be good.'

Rhode Island’s large, nonprofit health care providers were already bracing for a seismic shift in their industry due to federal reform efforts when self-described change-agent Steward Health Care came to Woonsocket. More

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Focus: HEALTH CARE

Steward model would alter landscape

'Specialty care leaving the state would not be good.'

PBN FILE PHOTO/DAVID LEVESQUE
LANDMARK EVENT: If purchased by Steward Health Care, Landmark Medical Center would become a R.I. anomaly – a for-profit hospital.
Posted 5/21/12

Rhode Island’s large, nonprofit health care providers were already bracing for a seismic shift in their industry due to federal reform efforts when self-described change-agent Steward Health Care came to Woonsocket.

The private-equity-owned, Boston company that has bought 10 Massachusetts hospitals – including St. Anne’s Hospital in Fall River and Morton Hospital in Taunton – wants to bring a new for-profit community health care model to historically nonprofit-dominated Rhode Island.

If its purchase of Landmark Medical Center in Woonsocket is approved by state regulators, Steward says it will pump money into the struggling hospital and make it attractive to local patients who now seek treatment at more expensive facilities.

And the company does not intend to stop with Landmark but to try buying other struggling Ocean State community hospitals, such as bankrupt Westerly Hospital, and bring them into an integrated system focused on accountable care, avoiding hospitalizations and lowering costs.

Whether it will work in Massachusetts or Rhode Island is a source of great debate, but it’s a vision that links with the national shift away from fee-for-service health care to a model based on lower costs and provider cooperation.

How Steward’s new paradigm will affect Rhode Island’s established academic hospitals and the nonprofit-owner networks, who foster research and are the largest private employers in the state, is a major concern to many in the health care industry, including some who say it could result in a loss of federal research dollars and commercially significant innovation.

Bond-rating agency Moody’s views the introduction of Steward into the Rhode Island health care ecosystem as a threat to nonprofit giants Lifespan and Care New England.

“For the larger higher-level or tertiary-service providers in New England, such as Lifespan and Care New England, the acquisition of small, nonprofit community hospitals by for-profit companies would change referral patterns in the state,” wrote Moody’s analyst Jenn Ewing in an April 24 report on potential expansion of Steward into Rhode Island.

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