WOONSOCKET — Landmark Medical Center was bustling the other day, almost exactly five years after going broke.
There were 112 patients in the beds, including a dozen in the ICU, and the emergency room had been so busy that it recently diverted patients to other hospitals.
The number of patients coming to Landmark — relying on Landmark — has changed little over the years, says hospital President Richard Charest, who was born there and has devoted himself to keeping the place alive.
It’s a bit of a shocker: Despite five years of court supervision (a form of receivership), five years of failed attempts to find a buyer, five years of multimillion-dollar losses, Landmark abides.
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“To my mind,” Charest says, “that demonstrates there needs to be a hospital in northern Rhode Island.”
That’s an argument likely to be heard Tuesday, when a Health Department advisory committee holds its first meeting on the proposal to sell Landmark to Prime Healthcare Services, a for-profit 18-hospital chain based in California.
The stakes are higher than ever for Landmark. A previous prospective buyer won state approval but walked away, leaving the hospital with limited options.
“No one wanted this to go on for five years,” says hospital spokesman Bill Fischer. “We’re at the end of the road. If this transaction is not approved, it is very difficult to envision how we would go out and identify another buyer.”
But much has changed in five years. On both the federal and state level, the conversation has shifted, with a new emphasis on keeping people out of the hospital and boosting community services.
A statewide planning committee produced data showing that within four years Rhode Island will have about 200 more hospital beds than needed, at an estimated cost to the health-care system of $100 million. The committee’s research found that, contrary to popular belief, Rhode Islanders are willing to travel for care. Only half the people in Landmark’s service area get care at Landmark.
The previous would-be buyer, Steward Health Care System of Massachusetts, had little track record. The new buyer, Prime, has a long track record that some find worrisome: it has been the subject of negative media reports about its billing practices and is under federal investigation.
Prime points to its hospitals’ high quality ratings and asserts it is merely a victim of a union-led smear campaign. But questions about its suitability are likely to be more intense and numerous than any doubts about Steward.
And while Landmark continues to function, employees talk of anxiety, weariness and frustration at the seemingly endless delays. They have gone five years without a raise.
“I think people try to find the best attitude that you can have and are hoping for the best. But it’s a little scary,” said Nancy Dwyer, a unit secretary. Some employees have left, she said, but “most of the people are hanging in there and hoping for the best.”
Two employees who asked not to be named complained of heavy workloads, aging equipment and employees leaving or looking for jobs. One of the two said that patient care has not been endangered by the loss of workers, but those left behind feel they have to work much harder to keep up.
Jan Piso, president of the United Nurses and Allied Professionals local that represents about half of Landmark employees, said that the hospital is trying to hire but salaries are not as competitive as they once were.
The hospital has reduced its workforce from about 1,200 to 1,100. Fischer, the hospital spokesman, had no data on staffing vacancies, or whether the hospital is relying more on per-diem workers or overtime, saying that hospital employment is fluid everywhere. “We staff based on patient census,” he said. “We have a flex staffing model like other hospitals.”
Dr. Joseph P. Mazza, a cardiologist whose patients have gone to Landmark, said: “The hospital functions day in and day out without any problems. It’s fully staffed.”
With all its challenges, how has Landmark kept going? That the hospital has managed to maintain the loyalty of patients and physicians makes a big difference. Beyond that, Charest and Fischer credit the person whom some employees disdainfully call “the savage master”: Jonathan N. Savage, appointed “special master” of the hospital in 2008 by Superior Court Judge Michael A. Silverstein.
Savage’s job is to stabilize the hospital, keep it running, and find a buyer. His law firm, with 6 to 10 lawyers and support staff working on Landmark, has been paid $4.1 million over the five years, an average of $69,100 a month.
Fischer says it’s been a net benefit. The hospital saved $3.5 million over five years in executive salaries after the CEO left and other top officials took pay cuts, he said. Savage’s firm is also doing all the hospital’s legal work, eliminating the nearly $700,000 a year that the hospital previously paid its lawyers.
Fischer said that Savage bolstered the hospital’s finances by eliminating $6.2 million in bonded debt, negotiating a better rent agreement for the Rehabilitation Hospital of Rhode Island (which Landmark owns), selling Landmark’s share in Southern New England Regional Cancer Center for $1.5 million, negotiating better health insurance rates, and resolving its underfunded pension liability of more than $30 million, with no impact on employees, by transferring the liability to the Pension Benefit Guarantee Corporation.
The hospital has also benefited from financial help from its prospective buyers. Steward lent $2 million and then extended a $5 million line of credit, of which Landmark spent $4.25 million. Prime has also provided a $5 million line of credit, of which Landmark has spent $3.65 million.
If the sale goes through, Prime has promised to pay off the Steward debt and forgive its own loans. If the Prime deal fails, these accumulating debts will make Landmark that much less attractive to any future buyers.
What happens if Landmark closes down? Mazza, the cardiologist, says, “You can’t. It’s actually a busy community hospital. … Where do these people go?”
Dr. Harry Wanebo, a Landmark cancer surgeon, agrees: “When they make comments like ‘there’s a surplus of beds in Rhode Island’ — there may be someplace, but it’s not here. … These patients come here at the end of the game. They don’t have doctors; they don’t see doctors. When they come they’re sick as hell. They really need the help.”
But Wanebo’s comments point to another issue. Landmark may be so busy because community resources are lacking, says Chuck Jones, president and CEO of Thundermist Health Center, a community health center and a major primary-care provider in Woonsocket. “We need a presence in Woonsocket for at least some of the services that the hospital provides,” he said. “I don’t think that reducing capacity before you reduce the demand is a good idea. But I do think there are opportunities to reduce demand.”
Date: July 08, 2013