Rhode Island is unique on many levels, especially when it comes to healthcare.
Leaders from across the healthcare spectrum have joined during the past several years with the shared aim of transforming the healthcare ecosystem and improving the health of Rhode Islanders. We’ve collaborated to develop payment models rewarding quality of outcomes over quantity of services performed. Primary care providers, with investments from insurers, have created patient-centered medical homes to effectively coordinate care. For Medicare patients, Blue Cross & Blue Shield of Rhode Island introduced Oak Street Health Centers, providing wraparound services for patients in economically challenged communities.
Further, Rhode Island uniquely has regulations in place that limit the amount of annual price increases hospitals may be paid. We are only one of three states to implement a cost trend target to mitigate an untenable increase in cost and price. Recognizing that Zip Code is more significant than genetic code when it comes to health, we’ve focused on the non-medical factors that play an outsize role in determining health and well-being. The Rhode Island Foundation Long-term Health Planning Committee and the RI Life Index, a new resource developed through a partnership between BCBSRI and the Brown University School of Public Health, have advanced efforts to address these social determinants of health.
The most recent development related to transforming care is the proposed merger of Lifespan and Care New England, the two largest hospital systems in our state, which would combine with Brown University’s Warren Alpert Medical School to form a single academic medical center for Rhode Island.
While the merger may make sense, hospital consolidations like this one typically result in increased costs and stable or even downward trends in quality. From Pennsylvania to Michigan, examples abound of quality sacrificed while prices continue to increase. According to the National Institute for Health Care Management Foundation, especially in “tightly drawn, local markets,” price increases of 20, 40 or even 60+ percent followed consolidations, translating into higher premiums paid by individuals, employers, and workers purchasing private insurance, and higher out-of-pocket costs for patients without insurance.
Further, when the new entity purchases medical practices, prices for services provided by the acquired physicians have increased by as much as 14.1 percent, according to a study published by the Journal of Health Economics in May 2018. In February, Lifespan and Coastal Medical, the state’s largest hospital system and largest primary care organization, announced an affiliation anticipated to be completed by the end of 2020.
BCBSRI remains committed to transforming healthcare and health in Rhode Island. We hope that the proposed consolidated entity can be part of the solution. But we believe there are important questions to consider as the merger proceeds through regulatory channels so that we can achieve a better result in Rhode Island.
How will the new academic medical center, which will include Coastal Medical, continue to participate in ongoing transformation efforts with an eye toward decreasing cost while improving quality? What efficiencies, which could lead to lower costs, will be gained through consolidation? How will the new entity meet the state’s 3.2 percent cost-trend target? Will the new entity continue to work toward health equity for all Rhode Islanders in support of the work of the Foundation and other organizations? Will investments be made to address social determinants of health, such as affordable housing? And what entity will oversee cost and quality concerns, ensuring that the interests of Rhode Islanders come first?
As a company founded in a community mission, with a vision to passionately lead a state of health and well-being across Rhode Island, BCBSRI has a vested interest in an efficient, well-run healthcare system, and in a system that puts the needs of Rhode Islanders squarely at the center. We look forward to learning more and participating in an open dialogue that can help answer these critical questions. Through collaboration and partnership, we can demonstrate once again that Rhode Island is uniquely positioned to drive the right kind of change in healthcare. Rhode Islanders deserve no less.
Kim Keck is the president and CEO of Blue Cross & Blue Shield of Rhode Island. John C. Langenus is BCBSRI’s board chair