It appears the news surrounding the health care industry as it
approaches the new millennium will be as much about mergers as medicine.
That is certainly reflected in Rhode Island where mergers,
consolidations and affiliations have dominated the health care landscape
in recent years.
And 1999 could bring the biggest health care merger the Ocean State has
ever seen — as Lifespan, which features Rhode Island, The Miriam and
Hasbro Children’s Hospitals, looks to join forces with Care New England,
a health care entity composed of Women & Infants, Kent County and Butler
Hospitals.
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If such a merger is approved, it would create an eight-hospital, $1.4
billion health care delivery system and would give Lifespan more than 63
percent of the state’s hospital market.
The impact of mega-mergers on health care in general was the subject of
a recent forum at the Salomon Center for Teaching at Brown University;
entitled “Hospital Mergers: Are They Good for the Public Health?”
Vincent Mor, director of Brown’s Public Health Program and the forum’s
organizer, said that mergers among health care’s bigger players have
significant ramifications.
“The basis for having not-for-profit hospitals is that they serve the
poor, those who come in on a first-come, first-served basis, and the
local community,” Mor said. “The more these hospitals consolidate, the
greater the risk they may become less connected to their communities.”
The forum — which drew an audience sprinkled with health care
executives and politicians, as well as Brown University students —
featured a pair of professionals with widely divergent opinions:
Dr. Steffie Woolhandler, a Massachusetts internist, is a primary-care
doctor at Cambridge Hospital and a professor at Harvard Medical School.
Woolhandler is also a cofounder of Physicians for a National Health
Program, and she is among the leaders of the Ad Hoc Committee to Defend
Health Care, an organization of doctors and nurses who have lobbied
against profit-motivated medicine.
Woolhandler is decidedly apprehensive when it comes to health care
mergers.
“There is much to be skeptical about,” she said.
But she is even harder on for-profit hospitals, and the idea of health
care as a business.
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“Profit-driven health care is so grotesque — that you are going to make
a profit off the sick and needy,” Woolhandler said. “You have to be
cautious about an increasingly corporate-style approach that takes away
from the community-base concept.”
Dr. Mitchell Rabkin, retired chief executive officer of CareGroup, which
he helped form. CareGroup, of Boston, is dominated by the Beth Israel
Deaconess Medical Center. CareGroup had begun talks to merge with Rhode
Island’s Care New England, before Attorney General Jeff Pine ruled
against the proposal.
Rabkin said that while hospital mergers may be uncomfortable, they often
make business sense and result in better care for patients.
“If a merger can turn two negative bottom lines into one positive, why
not,” asked Rabkin.
Rabkin said merging health care institutions help to establish economies
of scale, create parity for third party billing practices and make
coordinated care more of a reality. In recent years, Rabkin said, there
has been “unacceptable inflation” in the health care arena.
Woolhandler, however, said the focus on health care in America should be
on universal entitlement, not big business. There are simply too many
people, Woolhandler said, who either have no insurance or are woefully
underinsured.
The growth of not-for-profit hospitals throughout the country,
Woolhandler said, is evidence of a system out of whack. For-profit
hospitals, she said, have been found to give fewer pap smears,
mammograms and to perform fewer childhood immunizations than non-profit
hospitals.
“The growth of for-profits has taken place in the face of evidence that
they are in fact inferior,” Woolhandler said.
But Woolhandler was also critical of not-for-profit hospitals, such as
those in Rhode Island.
“Not-for-profit hospitals are not exactly efficient when it comes to
administration,” she said.
Rabkin, in fact, suggested that health care is all about profits — for
they are what drives any business’s success.
“Not-for-profit hospitals also must make a profit to survive,” Rabkin
said. “The not-for-profit must put its profits back into the business.
It’s imperative that the not-for-profit hospital exist in an environment
where it can make even a modest profit.”
According to Rabkin, Rhode Island’s health care climate is ripe for more
mergers. He calls the makeup of Rhode Island’s network of hospitals “an
unusual situation.”
“It is bizarre that these hospitals should be separated into two
different — and sometimes opposing systems,” said Rabkin. “Whatever the
origins of this strange dichotomy, bygones should be bygones.”
But Woolhandler hears this talk of profits and mergers and acquisitions
and gets uncomfortable. Health care, she said, is supposed to be about
caring for the sick — for treating injuries and illness.
“Why did we let this cast of characters from Wall Street come into
health care,” Woolhandler said.
