CharterCARE Health Partners - News & Press Releases

Title:  One Hospital System for Rhode Island? That’s Not the Solution.

In recent weeks, these pages have seen the notion of a one hospital corporation or health system presented as a good prescription for Rhode Island. On the surface, this argument seems logical…but only if one agrees with a too-good-to-be-true thesis: that a sole, centrally managed and governed health care organization, with multiple sites across the state, can produce a more efficient and rational use of health care dollars while also driving clinical quality and consumer satisfaction.

I write to oppose what is a well-intentioned but flawed recommendation for Rhode Island health care. But first, some context and perspective is called for.

Most people are aware that continued escalation of health care costs in a faltering economy has accelerated consolidation in the hospital market…here and across the nation. That trend, first evidenced by the creation of multi-hospital systems in the 1990’s, was driven principally by the need to produce working capital—for acquisition of medical and information technologies and for modernization of facilities---by eliminating redundant clinical programs, infrastructure and administrative costs.

But the second decade of our new century brings with it new market forces that challenge hospital care in ways far more complex than cost savings through consolidation. Insurers and government alike are increasingly moving to risk-based reimbursement…where hospitals (and physicians) are incented to proactively manage utilization, develop and implement new models of care delivery and accept “bundled” payments in return for better reimbursement.

And, there has been a paradigm shift in how we think about the healthcare cost dilemma. We are well past the phase where blunt-instrument cost containment approaches will suffice. Today, we are asked to look at concepts such as value of dollars spent, return on that investment, accountability and transparency in quality measurement and reporting.

Today, evaluating hospital performance requires a matrix inquiry…where the equally important deliverables of ready access to the right mix of services, demonstrated and measurable quality, operating efficiency and price, all combine to produce a new definition of value in health care.

Against this backdrop, I would argue that consolidation in Rhode Island’s hospital sector has already produced extensive benefits. We have three health systems managing a total of 9 hospitals, each of which has wrung out excess expenses. At CharterCARE Health Partners (an affiliation of Roger Williams Medical Center and Our Lady of Fatima Hospital), we have achieved more than $20 million in sustainable annual operating cost reductions.

Further consolidation, to a point where Rhode Island healthcare is provided by one hospital corporation or system, is simply counter intuitive. We must remember that, barring a complete government takeover of health care, the hospital market will behave like any other…i.e. there will be market competition. And this means that active competition among multiple players will allow the consumer’s voice to be heard in a compelling way. More than any other single factor, market competition and consumer choice can and should be as important---if not more important—than government or insurer dictates.

Our economy has always been shaped by our varied markets’ response to consumer demand. And, since consumers are no longer shielded from the reality of health care costs, they should be able to migrate to whatever market player that, in their mind, offers them the best mix of services, quality and price.

A one-system “quasi-public utility” marketplace simply will not behave in this fashion. Elimination of competition will encourage cost inflation, hamper access to services and threaten quality. Uniform state-wide healthcare planning makes absolute sense, and collaboration among healthcare providers to benefit the citizens we have the privilege and obligation to serve is also the right thing to do. But, like other things in life, too much of a good thing such as consolidation can produce negative effects. We should let the consumer—the end user of all health care—continue to exercise a rightful amount of influence on our already heavily regulated hospital industry.

Kenneth H. Belcher
President & CEO
CharterCARE Health Partners

CharterCARE Health Partners is the corporate parent of Roger Williams Medical Center and St. Joseph Health Services/Our Lady of Fatima Hospital.