In fact, Steward Health Care is the new name for what was once Caritas Christi Health Care, formerly a Catholic non-profit health system that was acquired in 2010 by Cerberus Capital Management, a private equity firm (look here). While the advertisement above (and Steward's own web address, ) imply that Steward is only about providing health care to the poor and needy, and perhaps that Steward, like Rhode Island BCBS, is non-profit, neither is quite true. The problem is that we know very little about Steward Health Care's executive compensation practices, budget, and taxes. Steward Health Care and Cerberus Capital Management: Executive Compensation, Budget, and Taxes If Steward Health Care saw fit to bring up the executive compensation practices, budget, and taxes of Blue Cross Blue Shield of Rhode Island as relevant to the dispute, might Steward Health Care's executive compensation practices, budget, and taxes also be relevant? This all started as a contract negotiation between a health insurer and a local hospital system which is about to be acquired by a regional hospital system. So perhaps RI BCBS is not quite the ogre oppressing the poor that the advertisement implies it to be.īut wait, there is more. On the other hand, keep in mind that RI BCBS is one of the few health insurance companies to provide community (age-adjusted only) rated individual health insurance even for people with pre-existing conditions, (look here) at the behest of state law, to be sure. Apparently, however, Blue Cross Blue Shield of Rhode Island does pay state taxes (per this report). In fact, the most recent figures made public by RI BCBS on executive compensation showed that CEO Peter Andruszkiewicz was offered total compensation of $600,000 a year when he started in 2011 (look here.) Also, as suggested by the advertisement above, there has been considerable local controversy about the size, scale, and price of the new RI BCBS headquarters (e.g., here).
In addition, Blue Cross Blue Shield of Rhode Island was beset by a scandal before we began Health Care Renewal (look here), involving allegations of excess compensation given to and conflicts of interest affecting its CEO.īlue Cross Blue Shield of RI: Executive Compensation, Budget and Taxes Given that we have frequently discussed how self-interested, over-compensated executives may fail to uphold, or may even undermine their health care organizations' missions, this seemed like a narrative primed for further discussion on Health Care Renewal. Instead, they issued their response: Terminate Landmark Medical Center. Blue Cross refused to even discuss the proposal. Steward, trying to be helpful, proposed base rates that were 5% below the state median, quality metrics used by the federal government, and a commitment to payment reform. Then, in May of this year, they refused to give Landmark Medical Center in Woonsocket a long-term contract without Steward Health Care participating. And for all that exorbitant spending, they pay absolutely nothing in Rhode Island state taxes. They dish out million each year in executive salaries. They invested a small fortune on their opulent corporate offices in Providence. WHAT KIND OF CHARITABLE ORGANIZATION SPENDS $120 MILLION ON ITS HEADQUARTERSīUT DENIES SERVICES TO ITS POOREST COMMUNITIES?īlue Cross & Blue Shield of Rhode Island is designated as a "charitable organization." But they certainly don't spend like one. One advertisement that has run at least three times, by my count, includes the following text:
CITRIX STEWARD ORG SERIES
Steward Health Care has run a series of full-page advertisements in the Providence Journal. This difficult negotiation prompted Steward Health Care to make the discussion more public.
The negotiations have not been going well, so RI BCBS notified its policy-holders that it is possible Landmark will not be in its network in the future. Meanwhile, Landmark has been in negotiations with Rhode Island Blue Cross Blue Shield, the largest RI health insurance company. It is now in the process of being acquired by Steward Health Care, a regional hospital system based in Massachusetts (summarized here and here). It has been in financial difficulty, and hence management negotiated a buyout while in receivership a buyout was negotiated. Landmark Medical Center is a small health care system in northern Rhode Island. An advertising campaign by the larger hospital system that is set to absorb our local one provides lessons on how important health care policy issues are publicly discussed. Negotiations between a local RI hospital system and the largest RI health insurer have now become very public.
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