A decade ago, Prospect Medical Holdings Inc. was seen as a potential savior for two struggling Rhode Island hospitals.
Today, Roger Williams Medical Center in Providence and Our Lady of Fatima Hospital in North Providence are still struggling but in an even worse reimbursement rate environment. And Prospect is trying to salvage what it can from a sale of both.
The new potential savior, The Centurion Foundation Inc., has a plan it says could stem the losses in part by turning nonprofit. The proposal includes $80 million in investments with plans to hire 200 workers.
Given that no other suitors have stepped forward, what’s not to like? Well, first is that Centurion has no experience operating hospitals. And, as this week’s cover story reports, the $160 million hospital purchases would rely on the sale of bonds that must be paid off.
Centurion’s debt-financing plans will be closely scrutinized by state regulators. They must balance those financial risks with the potential that one or both hospitals could significantly reduce services or close without a new owner.
It’s a balancing act playing out with hospitals across the country. In Massachusetts, state leaders are scrambling to protect eight hospitals, including ones in Taunton and Fall River, operated by Steward Health Care, which has filed for bankruptcy.
If you think Rhode Island is somehow in better shape, guess again. Lower Medicaid and Medicare reimbursement rates here create additional financial pressures that lawmakers must do more to ease, to give hospitals a fighting chance to not just survive but grow.