Hospital efficiencies of scale and rich exiting execs

From Robert Whitcomb’s “Digital Diary,’’ in GoLocal24.com

The financial losses stemming from the COVID-19 pandemic  will apparently speed up something that has often seemed inevitable over the past two decades, in fits and starts, for years: a merger of Rhode Island’s two big hospital groups – Lifespan and Care New England (CNE) – which include Brown University’s Warren Alpert Medical School teaching hospitals. The two groups have been swimming in deep red ink in recent years, which has only worsened in the pandemic, and so naturally they seek more efficiencies of scale, and to reduce wasteful redundancies, in Rhode Island’s health-care “system’’.

Such a merger, in creating a  much more powerful entity, might keep the Ocean State’s health-care system out of the control of Boston-based hospital giants, particularly Mass General Brigham (formerly Partners HealthCare). But an unsettling question will be whether the new Rhode Island entity will use monopoly pricing power to jack up its prices, big time.

State regulators will have their hands full in dealing with such a behemoth. And it will be interesting to see the bright golden parachutes of  hospital executives made redundant by the union of these “nonprofits’’ as the parachutes waft them down to the ground in, say, Palm Beach. Since Lifespan is bigger than CNE, and therefore would in effect be the purchaser, I assume that the execs of the latter would be more likely to go.

But then, there will probably be lots of layoffs of those with administrative jobs if the merger goes through, as seems very likely

On a happier side, a merger would probably strengthen Brown’s medical and  public health schools, including their research capabilities, by uniting them with a stronger organization.

Still, given the  size and fame  of the  medical center in Boston, only about 50 miles away, even the big new Rhode Island group will probably be hard-pressed to compete with “The Hub’’  in some specialties.