(Brian McDonald)
Name: Gerard R. Goulet
Position: Chairman of Health Law Practice Group, Hinckley, Allen & Snyder LLP
Background: Chief of the Division of Medical Care Standards at the Rhode Island Department of Health from 1978 to 1981. Goulet began as an associate at Hinckley, Allen & Snyder in 1981 and has been a partner at the firm since 1986.
Education: Harvard University, A.B.; Yale University, M.P.H.; University of Connecticut, J.D.
Age: 53
Family: Married, two sons
Residence: Warwick
PBN: Tell me a little about Hinckley, Allen & Snyder’s health-law practice.
GOULET: Our practice in healthcare is pretty comprehensive and includes most of the New England states. We have clients in Rhode Island, Connecticut, Massachusetts and now New Hampshire. We are essentially corporate attorneys who represent clients involved in the health-care industry, which is more regulated than most other sectors, so a lot of our involvement is on the regulation side. We deal with state and federal governments on anything from licensure to reimbursement to utilization. We probably do one form of work or another for virtually all the hospitals in Rhode Island, and we’re general counsel to four of them. And we have a very substantial nursing-home practice in Rhode Island and Massachusetts.
That’s a new office in New Hampshire?
Yes. Neil Castaldo is an attorney who has had a practice in the New Hampshire area for over 20 years, primarily in health care. He is basically anchoring the firm’s Concord office as we move into that marketplace. With the nature of health care being more federal and moving away from states over time, a lot of the work we do really transcends state boundaries. We have always looked to be doing more work in other states in New England besides Rhode Island.
Do different state regulations make it hard to do business? Is there a need to standardize health-care laws among states?
Certainly a multi-state insurance company is going to find it difficult, because every state is a little different in the way they approach regulation, from almost no regulation to very significant regulations. In fact, Rhode Island for health compliance is probably one of the more regulated states in the country. Whether less standardization would be a good thing sort of gets more into philosophy than lawwhether our country should be operating more as a federation of multiple states or dealing with the issues on a separate basis. We’re beginning to see in the insurance industry a movement toward federalization, I think, with the patients’ bill of rights that’s being debated in Congress. But it’s hard to say that increased federalization would make things better. If you look at what’s happened with nursing homes, you could largely say that it’s a federal process now as far as nursing-home regulation is concerned. It’s not as uniform as some would paint it because people apply the same rules differently in different jurisdictions.
I’ve heard Rhode Island lawmakers say that federal patients’-rights legislation will have little impact here because patient protections already exist. Do you agree?
I tend to agree. Things the federal government is looking at, like confidentiality or patients’ rights, generally are building on things that have been in place in Rhode Island for some time. And certainly to the extent that they’re involved with providing insurance beneficiaries more rights to contest denials of care, Rhode Island is probably one of the most regulated states for HMOs and managed-care plans. So I’m not sure that a patients’ bill of rights is going to make a real difference in Rhode Island.
What about the risk to employers?
In Rhode Island there is a valid forum for people to contest denials, but they rarely go beyond a simple mediation-type of process. Somebody reviews the facts and makes a decision. Whether (the legislation) will create a new advent for plaintiff lawyers to bring cases against businesses I think is a real question. I do think that from a business perspective, there are going to be more costs associated with managed care being less able to manage. The whole idea of managed care has been to restrict costs, to create utilization reviews so people would not over-utilize care. Now access to care is much more prominent than restricting access. So to the extent that managed-care was designed to reduce costs and in turn reduce premiums to businesses, it’s going to have to go the other way. That means, sure, we’re going to have patient protections, but we’re also going to be paying for them on the end of the employer, because access is promoted and utilization is not controlled.
A lot of hospitals in Rhode Island joined large networks. In general, have these instances of consolidation been able to deliver increased efficiencies?
That’s a pretty difficult question. With the consolidations that have occurred in Rhode Island, a number of hospitals have come together under the umbrella of a parent company. Those hospitals have largely remained autonomous. Certainly there’s some group purchasing advantag-esthey’ve been able to buy things cheaper. But on the expense-reduction side, until there’s a real movement to consolidate all services in one location as opposed to having multiple services provided within a community, there’s unlikely to be any real significant cost savings. But I think the cost savings that have been achievable, on the group purchasing side, have been achieved. Nationally, I think the consolidation wave is probably, if not totally stalled out, it’s diminished considerably from what it was five years ago.
Do you think competition among hospitals is good for the quality of health care?
It’s hard to talk about a competitive marketplace given the level of regulation that exists. Even though we’ve got a “competitive marketplace” to a certain extent, no one can get a real leg up on anybody else. We still have certificate-of-need laws, if you want to do anything off your campus you need to get a license, etc. All of the providers are having a difficult time getting paid the money they need to provide quality care. The Medicaid program pays Rhode Island nursing facilities I think $10 less than their costs, on average, which puts them down around the bottom 15 in the country. Hospitals in Rhode Island are 50th. They only get 92 percent of costs from private payers. So when you’re dealing in an environment where you don’t have enough cash and you don’t have a public hospital system that takes care of the poor, then you’re really hampered from a cash-flow perspective.
Why are reimbursement rates from private insurers in Rhode Island so low comparatively?
Historically, expenses here have been lower than other places. That shouldn’t make a difference in the disparity between your costs and your reimbursement. But probably the overriding factor is that we’ve only got two major insurers in Rhode Island to speak of. It’s very difficult to be able to have leverage with those payers. You can’t really walk away from the table and say ‘OK, we’re not going to participate in your program anymore.’
Is the tough reimbursement picture the only reason that many hospitals are losing money?
A lot of people keep pointing out that maybe the hospitals aren’t as efficient as they could be. I know we’ve looked at that issue ourselves just to make sure that we weren’t missing something. At least from the Rhode Island perspective, there’s not a lot of fat to cut in the system. One of the chronic problems with some of our clients is that they’re too lean in terms of administrative staff. And of course if you listen to the unions, hospitals are too lean on the patient-staffing side. Although we may be lean administratively, I don’t think there’s a lot of evidence to show that we’re lean on the patient-care side. The other potential problem is that hospitals are utilized too much.
What will be the toughest aspects of HIPAA (federal Health Insurance Portability and Accountability Act) compliance for providers?
Probably making sure they have some good software programs. Again, it’s one of those things that, for a Rhode Island facility, a lot of things HIPAA is promoting is nothing more than what (providers) have been doing all along. To the extent that state laws are more restrictive in terms of disclosing patient information, they’re going to override HIPAA. I think the major change is going to come in terms of people on the floors of the institutions who traditionally work with the patient records. To the extent that they’re precluded from seeing parts of the record that they don’t need to see, that may require facilities to spend more time worrying about internal movement of records.
