3 Top RI Healthcare Leaders Warn “We’re in a Crisis, We’re Going to a Disaster.”

John Fernandez, President and CEO of Brown Health PHOTO: Brown Health

Three of the top leaders in Rhode Island’s healthcare system are hitting the panic button about an expanding healthcare crisis.

They expect the situation to be far worse if state leaders do not take immediate action.

GoLocal spoke with John Fernandez, the CEO of Brown Health; Dr. Michael Wagner, CEO of Care New England; and Martha Wofford, the president and CEO of Blue Cross & Blue Shield of Rhode Island, last week, and there was a clear and consistent warning that the system is near collapse.

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The three — Fernandez, Wagner, and Wofford — who can sometimes be collaborators and in some instances competitors, are in unison in this warning about dangers playing out now in Rhode Island.

Fernandez was blunt in his description of the situation. “I’d say the last couple of years have been some good incremental steps. It’s just we see it as the increments aren’t gonna work because we’re in a crisis, but I said to the Senate president [Val Lawson], we’re in a crisis, we’re going to a disaster. “

Fernandez and Wagner run hospital groups that together provide more than 80% of hospital services across the state.

 

Jobs Impact

The impact they warn of will hit patients’ access to care, ability to retain talent, and to retain jobs, both in healthcare and beyond. Hospitals are major forces driving the construction industry, and Wagner and Fernandez said that in this environment, new projects will slow, if not stop.

In the past year plus, layoffs and closures have hit Thundermist, Providence Community Healthcare Centers, Blue Cross Blue Shield of Rhode Island, and Anchor Medical, to name but a few.  CharterCARE went bankrupt, now operates under new leadership, and is significantly underfunded.

And all three leaders worry that if the Rhode Island General Assembly does not take action this year, then the system will unravel.

Wofford said that her comments are analogous to a bridge inspection warning that the bridge is going to fail.

The healthcare system needs an infusion of $200 million. Dollars in for Medicaid are matched by the federal government on a nearly two-to-one basis.

Fernandez, whose Brown Health now operates two hospitals in Massachusetts, points out how far Rhode Island has fallen behind.

Rhode Island has among the highest Medicaid enrollment in New England at about 30% of the population. Provider reimbursement rates are the lowest in the region.

In one example, Fernandez cited, Rhode Island Medicaid allows for roughly $1,800 for a total hip replacement. Massachusetts Medicaid allows about $7,670 for the same procedure. The implant itself costs $2,000.

 

Dr. Michael Wagner, CEO and President, CNE PHOTO: LinkedIn

What Is Causing the Crisis?

There are a number of events building on one another to drive the crisis. First, Rhode Island has failed to keep pace with necessary Medicare and Medicaid reimbursement rates. Rhode Island consistently ranks among the lowest in the country.

Wagner said, “But at the macro level, you look at how much we get paid for Medicare versus what it costs. We’ve done an analysis. We lose about $40 million just on cost. What’s interesting about that $40 million on an annual basis, if you look at our first six months, we’re [Care New England] $20 million off. And so we look at it and go, that’s a structural reimbursement problem.”

“The other part is that, as you know, commercial, we get paid at a much higher rate. And for years, we, as a social compact, have agreed that the cross-subsidization from the commercial side to Medicaid has been acceptable from a health care finance perspective. The problem with that is that those commercial rates are now unacceptably high. People can’t pay for it. The exchange. 10,000 people have come off the exchange because they’re exorbitant, just too expensive. So we’re at a point where we have a structural reimbursement problem with Medicaid. For us, it’s worth about $40 million. And we’ve got to fix that,” said Wagner.

Martha Wofford, President and CEO, Blue Cross Blue Shield of Rhode Island PHOTO: BCBSRI

“And if we fix it, we actually will stabilize health care from our perspective,” Wagner added.

Wofford said about the need for additional medicaid funding, “It’s a two-to-one match. It is very leveraged to fund Medicaid and get the federal match. And as you know, with the one big beautiful bill, they made some of the mechanisms to do that more difficult, the government did so, and we as a state have not taken advantage of those, that structural opportunity compared to other states.”

The warnings have been issued. The question is, will Governor Dan McKee and the General Assembly take action?

 

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Josh Fenton, CEO & co-founder

Fenton launched GoLocal in 2010. 

Prior to launching the local media company, he had a career in government, working on Capitol Hill, serving as an appointee of three governors, and being elected to the Providence City Council. 

For a decade, he ran an award-winning advertising and public relations firm that worked with some of the world’s best brands.

He was a journalism and history major at the University of Rhode Island. And, he has a degree from Brown University.

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