If Rhode Island’s health care system continues on the track it’s on, a new SHAPE Foundation study shows, by 2030 they’ll be short 200 to 400 beds, and it’s unclear where they’d get the hundreds of millions of dollars needed for expansions, renovations and new equipment.
But there’s also a great deal of overlap and duplication in Rhode Island’s hospitals: multiple cancer centers and cardiac surgery centers, for example, some of them new.
And the way state residents use hospitals isn’t efficient, either – emergency-room use is disproportionately high, the SHAPE study shows, 35 to 40 percent above the U.S. average. Hospitals also handle the vast majority of surgeries, while nationally, ambulatory surgical centers handle about 28 percent of outpatient procedures.
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So how did Rhode Island get to this point, and who’s going to fix the problem?
On Monday, members of the Permanent Joint Legislative Committee on Health Care Oversight took their first stab at those questions. And while it’s much too early for a consensus on what the state needs to do, committee co-chairs Rep. Steven A. Costantino (D-Providence) and Sen. Elizabeth H. Roberts (D-Cranston) suggested it will be government that leads the charge, with close involvement by health providers and insurers alike.
“This information is really what we need to begin this discussion,” Roberts said.
The study seems to recommend that kind of approach, noting that state laws and regulations – especially the Hospital Conversions Act and the Certificate of Need (CON) process required for hospital expansions – “seem to promote the status quo.”
The CON system is “a major factor” in why Rhode Island’s hospitals are relatively cautious in adopting new technologies, the study says, and the Conversions Act is described by some hospital leaders as “a significant barrier to innovation.” Restrictions on the closure of facilities or service lines are also a burden, the study notes, limiting “hospitals’ flexibility in reducing investment in unprofitable businesses.”
Speaking to the Joint Committee, Gary D. Ahlquist, of Booz Allen Hamilton Inc., one of the authors of the study, drove that point home even more, noting that Rhode Island’s approach to hospitals has produced and maintained the system we have today, with 13 hospitals, most of them small, not very specialized, and catering almost exclusively to Rhode Islanders. Maryland, by contrast, which is heavily regulated as well, but in a different way, has Johns Hopkins Medical Center, whose expertise draws patients from across the country.
Retired Supreme Court Justice Robert G. Flanders Jr., who chaired a 26-member panel of experts that advised the study’s authors, said such findings “really [do] raise fundamental questions about the system we’re in, and whether we should consider alternatives, even on an experimental basis.”
What about health insurers’ role? Given that they’re paying the bills, could they play a role in reshaping the system as well?
The study is fairly vague on that point, but in an interview, Ahlquist said insurers in other states have tried to shape the hospital system, with limited success. Blue Cross & Blue Shield of Massachusetts, for example, has developed a tiered payment system that steers patients toward specific hospitals for specific procedures.
“Generally it’s very difficult for them to effect [change] without being very drastic,” Ahlquist said. “I haven’t seen it work yet.”
Blue Cross & Blue Shield of Rhode Island, the sponsor of the SHAPE study (and four previous ones), has its own experience on this front. Former CEO Ronald Battista tried to mediate a merger between Landmark Medical Center and Roger Williams Medical Center, and brought public wrath upon himself and his company.
“One of the lessons learned by what Ron tried to do … is that the subject has to be approached collaboratively, not singly,” said James E. Purcell, Blue Cross’s new president and CEO. But he said insurers “not only should have a role, but have an obligation” to their subscribers to get involved, and “do whatever they can to improve the efficiency and quality of medical service and hospital services.”
To effect change, Purcell said, will require “an incredible amount of political will and perseverance, because each one of these hospitals is very proud of what they do, and they’re run by people who are looking to expand their business and do better financially.”
Who can bring everyone to the table? Purcell suggested the new health insurance commissioner, Christopher F. Koller – whom Roberts also clearly sees as the point person.
As CEO of Neighborhood Health Plan of Rhode Island, Koller has been directly involved in shaping health care through payer-provider collaboration. Asked whether he saw himself playing a major role in addressing the issues raised by the new SHAPE study, Koller replied that he does.
“How health insurers pay makes a big difference in the delivery system they get,” he said.
Edward J. Quinlan, president of the Hospital Association of Rhode Island, said the SHAPE report confirms much of what hospitals have long known about their situation. But don’t presume that hospitals aren’t working on some of the problems themselves, he suggested.
“We’re in a competitive model, as in virtually every other state,” Quinlan said. “But hospitals, by and large, do work together. It may not be formal, but I believe within the medical community, people understand where people can get the best services” for specific conditions. “No hospital in the state is attempting to be all things to all people.”
Quinlan did agree with Koller, Roberts and Purcell that the payers have a big role to play in solving the hospitals’ problems – though he came at it from a different perspective.
“The single major issue impacting hospitals,” he said, “is the reimbursement rates they get.”
