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RI community shares input on proposed hospital merger

Costs, equity, lack of evidence among concerns raised as application awaits state and FTC decisions

<p>If approved, the merged healthcare system will encompass 80% of Rhode Island’s hospital infrastructure. </p>

If approved, the merged healthcare system will encompass 80% of Rhode Island’s hospital infrastructure.

Rhode Island’s two largest health care systems’ application to form an integrated health system has entered a 120-day review period following the completion of the application in November.

The proposal would merge Lifespan and Care New England’s health and clinical care, health management, research and medical education into one system. Combined, the new system would include about 80% of the state’s hospital infrastructure, according to The Boston Globe.

The merger would also create an academic health system in partnership with the University. Though not legally involved with the merger deal, the University plans to invest $125 million into the partnership over five years after its 2021 announcement, The Herald previously reported. The University will also have voting membership on the merged system’s Board of Directors.

The Rhode Island Attorney General’s office and the Rhode Island Department of Health have until March 16 to decide to approve, approve with conditions or reject the merger.

The merger is also under review by the Federal Trade Commission. Should the FTC deem the merger anticompetitive, the Rhode Island legislature has the ability to insulate the merger from federal antitrust enforcement, based on a state’s right to state-action immunity.

As the application awaits approval, involved parties and community members have expressed thoughts on the merger in three public comment meetings held Jan. 20, Jan. 26 and Feb. 10 by the Attorney General’s office and RIDOH. Community members were also able to submit written comments through Feb. 1. A significant share of community members voiced disapproval of the proposed merger despite the University’s claims that it would add billions per year to the state’s economy and expand access to health care.

Brown’s report on the merger

At the Jan. 20 public comment meeting, President Christina Paxson P’19 said that the merger will bring health and economic benefits to Rhode Island. To analyze these potential benefits of the merger for Rhode Island’s economy, the University spent $90,000 to commission a report by management consulting firm Tripp Umbach.

The report concludes that by 2035, “an integrated academic medical center in Rhode Island resulting from the merger of two competing health systems and a stronger alliance with Brown University would also significantly increase community health services,” directly and indirectly add 11,909 jobs to the Rhode Island economy and generate an annual economic impact of $5.3 billion.

“We want to have integrated health care that prevents disease in the community, that improves the quality of care, that controls cost growth (and) improves access,” Paxson said at the meeting, adding that the integrated health system will also drive economic growth.

“The current competitive nature between Lifespan and Care New England and the resulting lack of full integration with the education, research and clinical programs at Brown University limits the state’s potential economic impact of academic medicine,” the report continues.

Laurie White, president of the Greater Providence Chamber of Commerce, said at the Jan. 20 meeting that among these economic benefits, the merger “will provide a needed jolt to Rhode Island’s innovation landscape” by creating “a designated cancer center, a comprehensive women’s health network and a renewed focus on research and development that leads to commercialization.”

But Brown’s role in funding the report makes its findings less reputable, according to Elsa Pearson, policy director for the Partnered Evidence-based Policy Resource Center at VA Boston Healthcare System.

“Brown paid them a lot of money to write it,” Pearson said. “It’s in the people who are writing it’s best interest to produce what Brown wants to hear.”

Paul Umbach, founder and CEO of Tripp Umbach, said that the report was “independent and unbiased.”

Pearson also said that the report’s methodology was unclear.

“We can’t make specific judgments without making our own analyses, but the sources were kind of unclear, the data analysis methodology was unclear and they made some generalizations between other markets and what would happen in Rhode Island,” she added.

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Umbach said that the report is based on private proprietary data that Tripp Umbach has been collecting since 1995 and that, while the data are not public, the organization collaborated with the Association of American Medical Colleges to release state-level aggregated data up until 10 years ago.

Concerns over climbing costs

Some community members expressed worries that the merger will raise prices and reduce accessibility of health care despite the outlined economic benefits.

Speaking at the Jan. 20 public comment meeting, Johnston-based doctor Frank Savoretti voiced opposition to the proposed merger because of how it “clearly will create a monopoly of medical care.”

“This monopoly … would allow them to quickly put all the little guys like me, who represent only their patients and … are not employed by a huge corporation like Lifespan or Care New England … out of practice,” he said.

“In other parts of the country, when large hospitals have merged, costs have only gone up, not down, because they have the power to raise prices,” Savoretti added.

Pearson noted that economic literature largely supports the conclusion that hospital mergers lead to price increases. She pointed to one study examining multiple states which indicated that hospital mergers can increase prices by 11% to 54% despite promises of more accessible care.

Pearson said that the merger of Lahey Health and Beth Israel Deaconess Medical Center in Boston provides an example of how health care consolidation can increase prices.

“They essentially dominate the entire market,” she said. “Prices are astronomical, and they’re crowding out any competition.”

More generally, Pearson said that “decades of research show that mergers reduce access and increase prices.”

“The only explanation for why Brown would spend $90,000 to commission a report on the merger’s economic effects is that the University knows the evidence isn’t on their side,” said Liam Bendicksen ’22, a public health student who has conducted research with professors on hospital mergers. “Brown has in-house experts at the School of Public Health with subject matter expertise on hospital mergers and economics.”

In an email to The Herald, University Spokesperson Brian Clark wrote that “the economic study from last month offers a robust starting point for discussing the economic benefits of an integrated system, well beyond the health benefits.” Clark did not respond to specific questions about the validity of the report and its disagreement with other economic research.

Umbach said that Tripp Umbach’s report, which finds that health costs may decrease after the merger, differs from prior literature because of changing trends in the health care market.

“I don't disagree with the previous studies when they were done, but the studies that are now being done are showing that healthcare costs won't increase,” Umbach said. “Our research is a lot fresher than other data that’s been used in the past.” Umbach added that there’s not as much opportunity for costs to rise because Medicare and Medicaid, which are the largest payers of care in the state, have less flexible pricing.

“The days of increasing health care costs are over,” he said. “In fact, there could actually be lower costs because there'd be greater population health in the community.”

Lifespan and Care New England have committed to hold total annual health care spending increases to 3.2%.

Emphasizing equity

To ameliorate the concerns of community members, the merger will focus on increasing equitable access, Joseph Diaz, chief health equity officer for Care New England and associate dean for diversity and multicultural affairs at the Warren Alpert Medical School, said at the Jan. 20 meeting.

Diaz emphasized the new health system’s commitment “to developing a uniformed registration and data collection system so that patient outcomes can be consistently measured by relevant demographics such as race, ethnicity and language, as well as additional social factors.”

Diaz added that the integrated health system will use this data to better identify and respond to health inequities.

“Care New England and Lifespan have committed $10 million over three years to address social determinants of health, including lack of affordable housing, food and security, insufficient transportation to and from medical appointments, social isolation and unemployment,” Diaz said. “The new integrated health system plans to engage community leaders and partner organizations, as well as researchers from Brown's medical school and the School of Public Health, to identify priorities and develop a three-year investment plan to implement interventions with these funds.”

Specifically, Diaz said that the new health system plans to expand express and urgent care services for communities in Pawtucket and Central Falls, which “often lack the care settings necessary to treat acute, (non-emergency) medical events.”

But Luis Daniel Muñoz, a member of Rhode Island’s equity council who is running for governor, said that the merger should not be considered a step toward increased medical equity because of its potential to raise costs or cut access, especially for marginalized communities.

“Equity is being mixed up with this idea of academic research … and all these things are being brushed up into this pot, trying to convince everyone that good things will happen,” he said at the meeting. “But a little good does not mean that … the very communities that continue to experience medical racism will not continue to experience that.”

“Rhode Island needs community health infrastructure, not large hospital mergers that are going to increase medical prices,” he added.

Reducing redundancies

Sarah Weinreich, a registered nurse at Butler Hospital, said at the Jan. 20 meeting that she is “terrified of the impacts of this merger” because the system may not have the capacity to meet growing mental health needs, especially because of efforts to reduce duplicate services currently offered by both health systems.

“We need guarantees that there will be absolutely no elimination of services,” Weinreich said. “If a single quote-unquote redundancy is eliminated (with mental health services), … you would see even more vulnerable patients going without proper treatment.”

Pearson said that there is precedent for hospital mergers leading to cut services.

“There was a big merger in Tennessee, in a super rural area, with two big systems merging into one. They promised people up front, ‘We’re not going to reduce services at all, nothing’s going to change,’” she said. “In a few months, they’d already consolidated down more specific services.”

Cutting mental health services would “not be ideal,” Pearson said, because “the pandemic increased mental health crises all over the board.”

Spokespeople for Lifespan and Care New England did not respond to multiple requests for comment by time of publication. Clark did not address a specific question about whether the merger would lead to consolidated services in his statement to The Herald.

Academic health system

Rhode Island is currently one of the only states without an integrated academic health system, The Herald previously reported.

The proposed merger’s creation of an academic health system would yield benefits for both the University and Rhode Island, President Christina Paxson P’19 said at the Jan. 20 public comment meeting​​.

“There’s a wonderful role for the School of Public Health,” she said. “Integrating public health practices into medical care is an opportunity (to) do something really interesting and really great, and we contribute to educating the health care workforce in collaboration with other institutions around the state.”

“We've been working with these complementary but different health care systems, and it's made it very difficult to coordinate research that's integrated in with medical care,” Paxson previously told The Herald.

“Right now, research across Brown, Lifespan and Care New England is highly fragmented. This lack of research integration inhibits collaboration among the faculty and impacts our ability to compete with our peer institutions for grant funding,” according to the merger website.

The academic health system would create a unified body in which the University would contribute research and medical education and be supplied with clinical practice and resources from teaching hospitals.

Bendicksen said that potential benefits to Brown’s medical school should not overshadow potential harms of the merger.

“The one benefit that everyone has to acknowledge is that this is great for Brown’s medical school,” he said. “But you have to weigh that against the bulk of the evidence and what really matters for the broader community.”

Suggesting safeguards

In a recent report, an independent commission from the Rhode Island Foundation wrote that while the merger “has the potential to be a transformational step for Rhode Island’s health care system and can positively impact public health,” “the history of health system consolidation when it comes to cost, quality and access is uncertain at best.”

“We believe that Rhode Island can and must chart a different path so that the merged system — if approved — … is the cornerstone of a more inclusive, equitable, accessible, affordable, resilient and high-quality health care system,” the commission’s report continues. This “will require thoughtful consideration and sustained integration of community priorities from the outset of the process.”

The report recommends a number of measures, including commitments to minimize costs and expand access and oversight measures.

Specifically, the report suggests that the Rhode Island Attorney General oversee specific conditions for approval for five years and that the state develops a permanent regulatory entity with authority over the proposed new health system. Additionally, the report recommends the creation of a community oversight group broadly representative of the communities affected by the system. The report also recommends that at least 20% of the merged entity’s new board of directors comprises members of the oversight group.

Pearson said that price controls, like those that capped prices for seven years in the Beth Israel and Lahey merger, could temporarily prevent potential cost increases.

“Rhode Island could do something similar, saying prices won’t raise more than x percent above economic growth or can’t grow at all except allowing for inflation,” she said. “But you can’t say that indefinitely, and there’s nothing to say that after those years they won’t jack up prices.”

Bendicksen said that he does not believe the merger entities’ pledges are enough to guarantee prices will not rise. But because of how much such oversight would cost the state, regulations also cannot prevent prices from increasing in the long run, he added.

“Appropriate regulation can complement the efforts of system leaders to ensure options for patients that keep health care costs down,” Clark wrote.

Moving forward

Bendicksen said that the Brown community should pay closer attention to events that affect Rhode Island, including the proposed merger.

“All of these legislative and regulatory terms make people’s eyes glaze over, but from what I’ve seen, these sorts of obscure legislative and regulatory actions are what will shape the Rhode Island hospital market for possibly decades to come with some pretty severe consequences,” Bendicksen said.

“We have the tools to block a potentially very harmful merger. It’s the responsibility of the Brown community to speak up against something that might benefit the University at a very great cost to the state of Rhode Island and the cost and quality of care here,” he added. “It’s also the responsibility of regulators overseeing this merger to look at evidence from the literature and decide accordingly.”

“Our strong belief is that creating an integrated academic health system will best serve Rhode Islanders by ensuring world-class care, keeping primary and speciality in their home state, advancing biomedical research to the leading edge of treatment and therapies and enabling medical practitioners to efficiently provide care to the community,” Clark wrote.

“We recognize that there are a variety of perspectives on the Lifespan Care New England merger,” Clark added, “and that's precisely the reason for a public comment process.”



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