By Dominick J. Ruggerio and Christopher Callaci
We all want to see our community hospitals succeed. They employ Rhode Islanders and provide vital services. Unfortunately, our recent experiences in Rhode Island lead us to believe that the for-profit ownership model of a community hospital may in fact be detrimental to the overall health of our hospital system.
The collapse of the St. Joseph’s pension fund affected thousands of retirees and active employees. Individuals who spent their entire lives caring for the sick at a community hospital watched as their pension fund seemingly dissolved overnight. This tragedy inevitably led to litigation, which is proceeding steadfastly to ensure these pensioners are made whole.
Yet, as the litigation has unfolded, court filings have shed much needed light on the risky behavior of the for-profit, private owners of Roger Williams and Fatima hospitals — Prospect Medical Holdings. Court documents allege that Prospect has incurred over a billion dollars in debt, is insolvent, and headed for bankruptcy. Perhaps most concerning is that the two largest individual Prospect shareholders — Sam Lee and David Topper — pocketed more than $220 million in dividend payments while saddling the hospitals with debt. Prospect has behaved in a reckless manner, and they can only get away with these actions because of their for-profit status.
For the sake of our overall statewide hospital network, which is critical to the wellbeing of Rhode Islanders, we need to conduct a comprehensive review of for-profit hospital entities and their impact on the financial condition of the hospitals they operate, as well as the broader health care network in the state. That’s why we are writing in strong support of legislation that has been introduced in the State Senate that will impose a one-year moratorium on the transfer of any hospital that involves a for-profit entity.
Under the leadership of Chairman Louis P. DiPalma, the Senate Rules, Government Ethics & Oversight Committee will conduct a series of hearings on the for-profit hospital model. These hearings will review applications pending at Health Services Council for a transfer of control at Fatima and Roger Williams, the Hospital Conversion Act application pending through the Department of Health and Office of Attorney General, and the broader impact of this and other potential for-profit hospitals on the state’s overall hospital network.
We are extremely grateful to Attorney Max Wistow and Receivers Stephen Del Sesto and Thomas Hemmendinger for their unwavering efforts to protect the dignity and security of thousands of Rhode Island health workers by bringing about settlements in the pension case. Their efforts have also helped bring to light these serious questions regarding the current financial condition of the facilities. It is appropriate and necessary that, before the approval of any additional transactions, we undertake an exhaustive review and gain a thorough understanding of all the implications involved with for-profit hospitals operating in our state.
We have experienced the ripple effect that takes place when a hospital closes. Not only does access to care get harder for the members of the community that had been served by the facility, but the impact of the closure is felt in crowded emergency rooms across the state.
A pause is needed before any consideration of a hospital sale to or from a for-profit operator in Rhode Island. The one-year moratorium on such transfers under consideration in the state Senate should be enacted in order to ensure the strength of the state’s overall health care network.
Dominick J. Ruggerio (D – Dist. 4, North Providence, Providence) is President of the Rhode Island Senate. Chris Callaci is General Counsel of United Nurses and Allied Professionals.