State health care leaders for months have warned of a hospital system in financial crisis. Yet several local hospitals recently finished or are moving ahead with costly new construction projects that at least give the appearance of financial stability.
As this week’s cover story reports, the reality is that the construction projects in many cases speak less to the hospitals’ current financial health than their increasing need to compete while meeting community needs.
“If we want to be the brand we want to be, we need to have better facilities,” said Peter Markell, Brown University Health’s chief financial officer. The state’s largest health system is embarking on a 10-year, $1 billion overhaul of its flagship Rhode Island Hospital even though it posted a $3.8 million loss in the last fiscal quarter.
Hospitals leaders say the projects help attract top doctors, nurses and other staff, and in some cases additional revenue from wealthier patients who could choose to go elsewhere.
It’s not unlike the challenges facing businesses in other competitive industries. The difference is that hospitals are not exactly like other businesses. They have a mandate to care for the sick, including those who can’t pay.
Critics say they should look more to curbing costs than building their way to profits.
But struggling Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence are both cautionary tales for local hospitals.
None of them wants to be the next one fighting to survive because they didn’t invest to help grow revenue.