PROVIDENCE — A newly released report exploring the economic impact of the proposed hospital merger between Lifespan and Care New England claimed that the merger would increase the annual economic impact of the state’s academic medicine sector from $8.2 billion in 2020 to $11.5 billion by 2035.
Brown University has committed $125 million in capital over the first five years of the merger if it’s approved by regulatory bodies. The merger aims to create a fully integrated academic medical center in Rhode Island.
“A fully integrated academic medical center in Rhode Island can combine leading-edge research and renowned medical expertise to improve the quality of care; advance biomedical discovery; and educate future leaders in medicine, public health, and biomedical engineering. It would create a vibrant driver to the state’s economy,” the report from research firm Tripp Umbach reads, echoing previous statements offered by executives at Brown, Lifespan, and Care New England.
But health policy experts said the report, which was commissioned by Brown University and cost $90,000, is flawed and relies on unclear data.
Obviously many universities make a good chunk of their $$ from their hospital, but it's still always a little jarring to see a paid-for "study" pushed out by a respected university that flies in the face of a large body of evidence from the academic literature. https://t.co/muM67MxNzP— Loren Adler (@LorenAdler) January 11, 2022
Loren Adler, the associate director of University of Southern California’s Brookings Schaeffer Initiative for Health Policy, said that many universities make money from hospitals that are associated with them.
“But it’s still always a little jarring to see a paid-for ‘study’ pushed out by a respected university that flies in the face of a large body of evidence from the academic literature,” tweeted Adler, whose research areas include insurance markets, provider payment, prescription drugs, Medicare, and the Affordable Care Act.
The mind reels. Who needs evidence - some from your own faculty- when you can commission a consultant ?— Christopher Koller (@CKollerMilbank) January 11, 2022
Allan Joseph, a fellow in pediatric critical care at University of Pittsburgh Medical Center Children’s Hospital of Pittsburgh, took to Twitter where he said he’s been following the twists and turns of Lifespan and Care New England’s history of deals and isn’t surprised that they, with the help of Brown University, commissioned a “positive study.”
“That’s sort of par for the course here,” he said.
I've been following this saga for a while now. I'm not surprised Brown/Lifespan/CNE commissioned a positive study on a proposed merger - that's sort of par for the course here. But I do want to note a couple of things from my first skim of the report: https://t.co/RbfadMfVuc— Allan Joseph (@allanmjoseph) January 11, 2022
In the report, author and firm president Paul Umbach argued that health care systems are expected to provide high-quality care to more people at a lower cost across the country. Those demands, he wrote, can be met “only by consolidated health systems that oversee large patient populations are are adept at using sophisticated tools to manage population health.”
Joseph called that a “controversial contention.”
“I think it’s true that alternative payment models like are ACOs are directed consolidated health systems, but I don’t think it’s true that this is the only way to do so,” said Joseph.
The report also said that an out-of-state purchase of Rhode Island’s hospitals would have “damaging effects” and would “accelerate the move of high-quality specialty care out of the state.”
Joseph said it was remarkable that this report argued that the merger would be good for the state’s economy compared to having an out-of-state buyer.
“That’s definitely not a typical argument in antitrust proceedings,” he said.
The report compares Providence’s health care market to that of Pittsburgh, which it said has the highest percentage of employment engaged in academic medicine among all markets nationally. But the two cities have significant differences. Providence has a population of 179,494 people, according to the US Census Bureau, while Pittsburgh has more than 302,000. And Providence is much closer to both Boston and New York City than Pittsburgh is to the medical services in Philadelphia.
“Rhode Island is a very unique, very small market that will always exist in the shadows (and) context of New York City’s and Boston’s markets,” Elsa Pearson, a senior policy analyst of healthy law at Boston University’s School of Public Health, told the Globe. “Even if Rhode Island does create an academic medicine sector... There will be considerable competition. It’s a bit naïve to believe that new system will exist in a vacuum, independent of existing systems.”
“Just because ‘XYZ’ happened in Pittsburgh, doesn’t mean it’ll happen in Providence,” she said. “We have to be careful when we look at data and make assumptions about how trends will transfer over to new markets.”
James Bailey, a Providence College economics professor who specializes in health economics, said the core problem with the report is that it is “opaque” and does not cite sources for most of its numbers.
“And the entire ‘methodology’ section is one paragraph long,” said Bailey. “It also never really explains how exactly the merger would lead to more economic impact. It says it would create jobs, but doesn’t say how.”
The lack of transparency makes it unconvincing, he told the Globe, but also difficult to immediately identify data that was “definitely wrong.”
“I’d need to put in as much time as they did to write my own competing report,” he quipped. “Its possible their 2035 numbers could be right regardless of whether the merger goes through simply because health care, higher education, and biomedicine generally grow over time.”