PROVIDENCE – After more than two hours of discussion at the first meeting of the R.I. Senate Commission to Study Cost Containment, Efficiency and Transparency in the Delivery of Quality Patient Care and Access by Hospitals, Sen. Roger Picard, D-Woonsocket, posed the question that seemed to underscore the work of the new board looking at hospital costs: “Are there too many hospitals or not enough in Rhode Island?”
With Woonsocket’s Landmark Medical Center now operating in receivership, and its potential acquisition by Caritas Christi Health Care Systems stalled, the local political reality underpinning Picard’s question was evident.
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“There are no metrics to answer that question,” said R.I. Department of Health Director David Gifford, who likened a community’s support for a hospital in its locality to the same force that a community would exert opposing the location of a dump for nuclear waste.
Gifford had spent 30 minutes delving into the “transparency in hospital health care delivery and financing,” describing his agency’s efforts to establish an all payer data base, and the importance of this new database in determining the value, quality and efficiency of Rhode Island’s health care system. The data, however, did not necessarily provide easy answers to the political and economic considerations at play.
R.I. Health Insurance Commissioner Christopher F. Koller, in an interview with PBN following the meeting, agreed with Gifford. “Sen. Picard’s question is unanswerable. It’s very hard to answer objectively.”
“It’s important for small businesses to understand the conflict when we speak about the rising costs of health care,” Koller continued. “Hospitals are the main employers in our communities; hospitals are employing people using our insurance premiums and our tax dollars from Medicare and Medicare as revenue.”
Koller, who briefed the 17-member commission about the activities of the R.I. Office of the Health Insurance Commission, said that the reform of the hospital payment system and rate negotiation process in Rhode Island was absolutely necessary to increase the sustainability of the system. Koller called his health plan conditions “a middle road” between private negotiations and full public oversight, admitting that the process was iterative.
In opening remarks welcoming, R.I. Senate President M. Teresa Paiva-Weed invoked the economic importance of the Rhode Island’s hospitals’ continued health. “Rhode Island’s economy depends on a vibrant health economy,” she said.
Hospital Association of Rhode Island Executive Director Edward Quinlan stressed the economic impact of hospitals: 6,500 patients each day, $16.8 million in economic impact each day, serving as an economic anchor for Rhode Island, with a $1.7 billion payroll, or more than 20,000 jobs.
At the same time, Quinlan stressed the difficulties of hospitals to break even, with $432,000 in uncompensated care provided each day.
Sen. Joshua Miller, D-Cranston, chairman of the commission, said he will engage in an aggressive schedule of meetings in the next two months.
I disagree that Sen. Picard’s question is unanswerable as it was a specific finding of the now several year old “Shape Study” funded by BCBSRI, which found that RI did NOT have excess hospital beds. Admittedly this may not be exactly the same question and fewer but larger and better located hospitals might be more efficient, but the capital cost of such revisions would be considerable, whereas the existing facilities are paid for.
Hospital capacity cannot be considered in the same way as other industries, where backlogs in times of peak demand are acceptable. Our hospital system must be built to always provide immediate access and therefore cannot achieve optimum utilization on a continuing basis. One thing that would help would be to utilize the hospitals more for primary and ancillary services that have migrated to free standing facilities, ostensibly to reduce costs, but leaving the high fixed costs of the necessary hospitals intact–thus having the opposite effect.