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Officials: Merger will keep Memorial Hospital healthy

October 14, 2013

PAWTUCKET — While change is always unsettling, the merger of the Memorial Hospital of Rhode Island with the Care New England Healthcare System looks promising--both for the residents of the city that has been its home for over a century as well as the rest of Rhode Island, southeastern Massachusetts and even beyond.

The dust is still settling on the merger, which was sealed during an upbeat ceremony held Sept. 3 under a white tent on the grounds of the Memorial Hospital. In front of employees and the news media, Care New England President and CEO Dennis Keefe and interim President and COO Arthur DeBlois III signed official documents linking MHRI with CNE, and everyone was treated to a luncheon buffet.

Last week, there was the first sign of some fallout, as MHRI officials confirmed a reduction of seven employees, one a retirement but six as layoffs. The action was said to be due primarily to a redundancy of some functions and services.

Yet, while employees within MHRI might be understandably jittery, senior management say they are confident about a bright future that includes financial stability, expansion and job growth, particularly for those in the medical field.

CNE President and CEO Dennis Keefe is a seasoned health care industry professional who joined CNE after serving as chairman of the 62-hospital-member Massachusetts Hospital Association and nine years as chief executive of the Cambridge Health Alliance. He saw the dramatic changes that occurred in Massachusetts, where more than 97 percent of the population now has health insurance and the legislative measures that are being done now to address the related costs.

Keefe is also well aware of the high cost of health care, and the financial struggles that private, community hospitals like Memorial have been facing. He acknowledges the issue is particularly acute in Rhode Island, with its high unemployment rate and declining population. Yet, while he doesn't have all of the answers, he says it was clear when he took the helm of CNE that a different business model for healthcare is needed. The focus, going forward for Memorial and the other CNE facilities, will be to adopt a multi-faceted approach to this new framework, and it is centered around partnerships and collaboration.

Keefe said a lot of the discussion surrounding health care reform means getting control of expenses and improving quality through primary care and the “patient-centered medical home.” This was one of the main reasons for CNE's decision to acquire MHRI. “We had a lot of strength in primary care at Kent for southern Rhode Island, but in the Providence area and north, we did not have that strength. Memorial strengthens that primary care base in a major way,” he said.

Keefe noted that Memorial Hospital has a highly respected, primary care model in place, which is supported by its partnership with Brown University's Warren Alpert Medical School and its family medicine program. “When we looked at recruiting and retaining primary care physicians, this was impressive,” he said. He also said that the clinic that is on MHRI grounds “is one of the most highly developed patient-centered medical homes in the country.”

The change in the health care framework is one that moves away from the longstanding “fee-for-service” system and moves toward a “continuum of care” for the patient. “We're not just adding hospitals,” said Keefe, of the acquisition of Memorial, “We're creating a 'system of care.'” As an illustration, he noted that a patient could arrive at Butler Hospital for treatment of a psychological problem and also be found to need a cardiac procedure, or a patient goes to Woman & Infants for a pregnancy-related matter but winds up needing general surgery. Having the network of facilities all under CNE ensures a smooth transition of care. “And with medical records going all electronic, that's going to be huge,” he added.

As to the all-important topic of reining in costs, Keefe said a key factor is being able to look at CNE as a “system.” “By having all these hospitals work together, we can integrate clinical services and take advantage of administrative and support services that can be centralized,” he said.

Keefe said the management will be carefully evaluating functions that could be handled more efficiently by a central system. He said some of these include administrative services, finance, human resources, marketing, planning and philanthropy. “There are a number of administrative support systems that typically would be more efficient to consolidate than trying to replicate at each hospital,” he said.

“The recent layoffs (at Memorial) didn't come out of the blue. It was carefully looked at to see what functions could better be handled by a central system,” Keefe said. He added that across CNE, there has been a continual pressure by the reimbursement sector “to do more with less.”
However, Keefe added that throughout CNE, there is normally a turn-over of 30 to 40 positions each month, and the approach has always been to try to fill vacancies internally. “We think of layoffs as a last resort. We try to manage our turnover and use attrition to manage costs. If you do that relentlessly, you can achieve savings,” he said.
Keefe also said that efforts will be made to improve billing, coding for services, collections, and other procedures that would improve the revenue cycle for the hospital. “No one can tolerate the increases in medical expenses that have been going on for decades,” he noted.

When asked if there were any big changes ahead for Memorial, Keefe said it was premature to comment on. He noted that the acquisition was just a month old, and Federal Trade Commission rules allowed only certain things to be discussed. “We're just starting the process. Our focus so far has been on integration,” he said. He added that 32 work groups had looked at everything “service by service and area by area” and will next move on to “the operations side of things.”

An important change in Memorial Hospital's leadership takes place next week, when interim president and COO Arthur DeBlois III steps down under a planned transition and Ed Schottland takes over the post.

Schottland has been directing CNE's Integration Management Office and overseeing the work groups addressing the integration of Memorial into CNE.

Like Keefe, Schottland also has an extensive background in the health care industry, having served as executive vice president and COO at Saint Joseph Health and Tufts-New England Medical Center, and as a senior vice president and COO at Lifespan.

When asked about the future of Memorial, DeBlois said “it will continue to be an acute-care, community teaching hospital. In fact, it will be the hospital that will be the center for expanding CNE's primary care focus.”

DeBlois noted that for the past few years, Memorial has moved towards being a “patient-centered medical home,” and has been so successful with this transition that it is now held up as a national model. He credited Dr. Jeffrey M. Borkan, chief of family medicine, and Dr. Joseph A. Diaz, interim chief of internal medicine, for their work in developing a highly respected internal medicine and family medicine approach.

“The affiliation with the Brown medical school has helped us be a leader in that area,” DeBlois said. With a primary care research practice in place at Memorial, there is already a pool of primary care physicians to fulfill the patient-centered medical homes model that CNE is promoting. “This was one of the reasons Memorial was sought after by CNE. And they can bring this experience to Kent,” he said.

DeBlois also noted the many positives that the merger will bring to local residents. “When someone comes to Memorial for care, they will have access to a full continuum of care without being bounced around between doctors or care providers. It will be whole...seamless,” he said. While Memorial will continue to provide a full level of core care, if a patient requires a specialized physician or service, “We can tap into the resources that a Women & Infants, Butler, or Kent has,” he said.

Schottland explained the concept further, noting that patient-centered medical homes are focused on primary care and the patient. They are designed to use a team of primary care specialists, psychologists, nurse specialists, etc. to provide ready access to the patient at all times.

When asked about pending staff changes or reductions, Schottland said the management team is “in the process of exploring opportunities,” but that he couldn't be specific. He said there could be an opportunity to consolidate some corporate functions, but efforts will be made to take advantage of turnover and vacancies. On the flip side, he said there will certainly be more hiring of primary care doctors, nurse practitioners, and others in the medical field.

“Memorial is there to serve the community,” Schottland stressed. He added that there shouldn't be any reductions in the clinics or other changes in services that residents are accustomed to. In fact, there may be opportunities for expansion and research. “Possibly, we can rebuild some of the services we have lost over the last couple of years,” he said.

Schottland said he would particularly like to see more of the newly trained primary care doctors from the Warren Alpert Medical School join the permanent team at Memorial. “Most graduates tend to leave the state. But we want to encourage them to stay here,” he stated.

Schottland added, “We have a great opportunity here. We have the synergies for CNE to help Memorial and Memorial to help CNE.”

DeBlois concurred, saying, “As the health care industry and providing care changes, this (merger) has the dynamics that will allow Memorial and CNE to be at the forefront of that change. It will mean better health care for Rhode Island as a whole, and certainly for the Blackstone Valley.”

Follow Donna Kirwan on Twitter@KirwanDonna.

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