Talking Politics: The fallout from the hospital colossus collapse

By Ian Donnis 
Posted 2/23/22

STORY OF THE WEEK: The Federal Trade Commission and Attorney General Peter Neronha characterized their repudiation of the proposed Lifespan-Care New England merger as an open and shut case. The …

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Talking Politics: The fallout from the hospital colossus collapse

Posted

STORY OF THE WEEK: The Federal Trade Commission and Attorney General Peter Neronha characterized their repudiation of the proposed Lifespan-Care New England merger as an open and shut case. The merger, they say, would usher in a dangerously anti-competitive degree of market share in Rhode Island, while raising the cost and diminishing the quality of healthcare.

During a news conference, Neronha said Lifespan and CNE lack the financial wherewithal to pursue the merger and he criticized how a supplemental filing last October focused more on goals than a roadmap on how to achieve them: “I’ve been asking you for the plan since April. You’re asking me to approve a transaction where you don’t have a plan. Effectively, what they want this office to do under the Hospital Conversion Act is make a decision and let them figure it out later.”

The respective CEOs of Lifespan and CNE, Dr. Timothy Babineau and Dr. James Fanale, expressed disappointment about the rejection of the merger without responding to the thrust of Neronha’s findings. (In a statement, Christina Paxson, the president of Brown University – which had pledged $125 million for the vision of creating an academic health system with the two big hospital groups – asserted, “[A]ny potential negative impacts of a merger could be addressed through appropriate governance and oversight.”)

For now, the holy grail of a self-contained academic health system is dead, even with Lifespan/CNE’s big spend on a crew of influential lobbyists and other expenses, and what happens next remains unclear. Neronha downplayed gloom and doom scenarios about consequences from rejecting the merger, saying in part that Rhode Islanders will invariably continue to get most of their healthcare locally.

While the fallout from this decision will take time to assess, the regulators’ view is that whatever follows the merger’s demise, it’s better than backing an entity that would have towered over Rhode Island and its healthcare like a colossus. 

NEXT MOVES: Stay tuned for changes in Rhode Island’s hospital landscape. State lawmakers have no appetite, though, for supporting a certificate of public advantage, or COPA – a state-based end-run around federal anti-trust concerns – as a way of offering a different path for the envisioned pairing of Lifespan and CNE.

House GOP Leader Blake Filippi, a sharp critic of the proposed merger, has argued since last year that it was misguided for the state to chase away Partners HealthCare (now known as Mass General Brigham) as a potential suitor. Via tweet, Filippi said, “I respectfully suggest that @GovDanMcKee ask Partners Heathcare to resubmit their offer to buy CNE – and promise Partners that this time they will be treated fairly in R.I.” In his own statement, issued on request by reporters, McKee said he will work to ensure quality healthcare for Rhode Islanders.  

OVERSIGHT: Attorney General Neronha pointed to his approach last year with Prospect Medical Holdings, owner of Roger Williams Medical Center and Our Lady of Fatima Hospital, as an example of how state regulators can offer effective oversight of for-profit entities in the healthcare space. To recap, after a state health policy advisory panel remained unfazed by a warning about Prospect’s finances amid a proposed ownership change, Neronha got the company to commit $80 million to an escrow account. Prospect, however, was viewed a lot more favorably when it first acquired the financially troubled CharterCARE hospitals. And different attorneys general over time have had different approaches when it comes to overseeing healthcare companies, so what’s to say that Rhode Island’s capability to do that will remain robust in the future?

In an interview Friday, Neronha called that a fair point. He added: “The lessons from what’s happened over the last decade or so demonstrate what can happen when we don’t do that. And I think whether it’s out of self-interest or out of the public interest, more importantly, that regulators will step in and do their job.”

Neronha said he encouraged former Gov. Gina Raimondo to strengthen the regulatory side of the state Health Department. “We need a really strong group of regulators, not only in healthcare, but in lots of other areas,” he said, including the Coastal Resources Management Council, Department of Environmental Management and Department of Business Regulation. “At least in this office, I think, there’s enough of a history that it wouldn’t be wise to come into office and not be ready to do your due diligence on healthcare matters.” 

PROSPECT: Speaking of Prospect Medical, the AG’s office reports holding a recent meeting with representatives from the New York-based Centurion Foundation and QHR Health of Tennessee, potential buyers of the RI holdings of Prospect, the third-largest hospital group in the state. 

CLIMATE CHALLENGE: Federal climate scientists warned this week that sea levels on the U.S. coastline are expected to increase a foot by 2050, with bigger increases on the East and Gulf coasts. State Sen. Dawn Euer (D-Newport), chairwoman of the Senate Committee on Environment and Agriculture, offers this prescription on how to better respond to that threat. “I think we really need to pivot to a carbon-free future,” Euer said on Political Roundtable, “and I think continuing to both mitigate the problem by not spewing more climate pollutants into the air, while also making sure that we’re looking at adaptation.”

Euer, the Senate sponsor of the Act on Climate law passed last year, said Rhode Island has done a good job by requiring planning on the local level to look at climate change impacts. “But I think we really do need to be looking at both the federal infrastructure dollars as well as APRA funds and see how we can really support our municipalities, our cities and towns, because they’re really bearing the brunt of these costs.” 

CLIMATE CHALLENGE II: U.S. Sen. Sheldon Whitehouse joined on a recent brief filed on behalf of the U.S. Environmental Protection Agency with fellow Sens. Richard Blumenthal, Bernie Sanders and Elizabeth Warren. This relates to how critics say the conservative majority on the U.S. Supreme Court is increasingly siding with polluters. “All the justices have a responsibility to the Court as an institution, beyond loyalty to the forces that got them there,” Whitehouse told The Nation. “The unassailable climate remedy is a pollution fee on greenhouse gas emissions. Even a Supreme Court that fossil-fuel dark money built can’t get around Congress’s clear power to establish such a fee under Congress’s taxation powers. That would be a good place to start.” 

CLIMATE CHALLENGE III: My colleague Ben Berke reports on how the former site of the Brayton Point energy plant in Somerset, Mass., is set to become “a factory to supply undersea electric cable to some of the nation’s first utility-scale offshore wind farms. The factory was promised as part of a joint proposal spearheaded this winter by Avangrid and Vineyard Wind, energy companies that have already received government contracts to sell electricity from offshore wind farms the partnership is developing 15 miles off the coast of Martha’s Vineyard. Hakan Ozmen, an executive at the Prysmian Group, said the cable factory in Somerset will employ at least 200 people.”

MARIJUANA: The General Assembly’s recreational marijuana legalization plan is set to emerge in early March, followed by a hearing process to gather public opinion. One key issue to watch is how the legislative proposal responds to the concerns of those disproportionately criminalized by the war on drugs. 

CD2 ROUNDUP: Seth Magaziner picked up endorsements from Carpenters, Local 330, and Unite Here, Local 26, and his campaign said it has raised $500,000 since the candidate switched gears by coming over from the gov race … Omar Bah has a new campaign website … Michael Neary is doing a launch event on Saturday, Feb. 19, from noon to 2 pm at the Crowne Plaza in Warwick … Ed Pacheco staged a virtual event Thursday … Also running: Joy Fox (D), Cameron Michael Moquin (D), possibly Sarah Morgenthau (D), per Ted Nesi, and Republicans Jessica de la Cruz, Allan Fung, and Bob Lancia. 

REDISTRICTING: While incumbents – Democrats and Republicans – are known for pressing their advantage in redrawing legislative lines in various states, the lack of machinations in CD2 is drawing interest outside R.I. Via Bloomberg Government: “Rhode Island’s new congressional map incorporates tiny tweaks to the state’s two districts after Democratic legislators declined to solidify their grip on the district of a retiring U.S. House Democrat.” 

Ian Donnis can be reached at idonnis@ripr.org. You can follow him on Twitter @IanDon. For a longer version of this column or to sign up for email delivery, visit thepublicsradio.org.

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Jim McGaw

A lifelong Portsmouth resident, Jim graduated from Portsmouth High School in 1982 and earned a journalism degree from the University of Rhode Island in 1986. He's worked two different stints at East Bay Newspapers, for a total of 18 years with the company so far. When not running all over town bringing you the news from Portsmouth, Jim listens to lots and lots and lots of music, watches obscure silent films from the '20s and usually has three books going at once. He also loves to cook crazy New Orleans dishes for his wife of 25 years, Michelle, and their two sons, Jake and Max.