Will Steward make Landmark more like a Cheesecake Factory?

August 21st, 2012 at 10:32 am by under Nesi's Notes, On the Main Site

The leaked letters WPRI.com has published documenting the tension between Steward Health Care System, Blue Cross & Blue Shield of Rhode Island and Attorney General Peter Kilmartin are just the latest evidence of how much difficulty Steward has had in actually setting up shop here.

Steward CEO Ralph de la Torre has wanted to buy Landmark for many years, and his company – a for-profit, private-equity-backed successor to Caritas Christi Health Care – appears to be the last hope for the struggling Woonsocket hospital. What’s less appreciated is how a deal would put Landmark at the leading edge of a health care revolution.

To understand why, look no further than the influential New Yorker medical writer Atul Gawande’s fascinating Aug. 13 article “Big Med,” which suggests that in order to contain soaring health care costs hospitals may need to become more like, well, highly efficient Cheesecake Factory restaurants. An excerpt:

Steward was launched in late 2010, when Cerberus — the multibillion-dollar private-investment firm — bought a group of six failing Catholic hospitals in the Boston area for $900 million. … Cerberus is one of those firms which specialize in turning around distressed businesses. …

When it looked at the Catholic hospitals, it saw another opportunity to create profit through size and efficiency. … It’s trying to create what some have called the Southwest Airlines of health care — a network of high-quality hospitals that would appeal to a more cost-conscious public.

Steward’s aggressive growth has made local doctors like me nervous. But many health systems, for-profit and not-for-profit, share its goal: large-scale, production-line medicine. The way medical care is organized is changing — because the way we pay for it is changing.

Gawande goes on to describe his experience in Steward’s “tele-ICU,” a remote command center where a doctor monitors and directs the intensive care units as Steward’s various hospitals, including St. Anne’s in Fall River – a sign of what’s to come if Steward does indeed take over Landmark. Read the whole article here.

• Related: New doubts on Landmark deal after Steward CEO’s harsh letter (Aug. 20)

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