Will Lifespan's separation from Home and Hospice Care of Rhode Island leave the agency to die on its own? The Rhode Island Department of Health's Health Services Council asked that question last week as part of an ongoing probe of Lifespan's finances.

Last year, Hospice Care announced plans to separate from Lifespan, the non-profit health-care giant that includes Rhode Island, Miriam, Newport, and Bradley hospitals, and the Visiting Nurses Association of Rhode Island (VNA). The proposed disaffiliation requires Hospice to repay Lifespan $2.2 million for services it received during six years as a Lifespan partner.

But in a report on the deal, the council notes that Hospice had a $1.8 million operating loss in 2001, and it wonders whether Hospice can afford the $472,611 in annual debt repayments required under the disaffiliation deal.

The council postponed action on the deal last week. Hospice chairman Jeffrey Chase-Lubitz says the delay was caused by disclosure of the VNA's separation agreement, which, as VNA chairman Colby Cameron told the Phoenix, includes $30 million in debt forgiveness. The parties are not renegotiating, but clarifying separation details, says Chase-Lubitz, who is unsure whether he will push to reduce the $2.2 million debt. Originally, Lifespan wanted $3.9 million, he notes, and the $2.2 million represents services and equipment that Hospice "should be paying for."

Health Services Council member Robert Quigley, a Tiverton chiropractor, has a different view. Lifespan is still paying $8.7 million a year to Boston-based New England Medical Center as part of an acquisition deal, he observes, "and poor Hospice is getting beat up on." When it was formed in 1994, Lifespan was promoted as a way to cut costs, Quigley states, "but all they did was increase costs."

Chase-Lubitz confirms that Lifespan's bureaucracy is costly and slows decision-making at Hospice Care. These conditions, plus a desire to avoid billing and personnel requirements designed for hospitals, led the two groups to agree to separate, he says.

Lifespan spokeswoman Jane Bruno didn't return phone calls from the Phoenix.

Last week, the council did approve a $4.1 million for-profit MRI center on Eddy Street. Rhode Island Hospital will own 25 percent of the business, which is projected to make a $1.1 million profit in its third year.

Citing "a reluctance of Lifespan to invest dollars in health-care," council member Marvin Greenberg asked why Lifespan didn't use its $942 million endowment to own such a profitable business. "We can't do everything we want to do all at once," responded Rhode Island Hospital president Joseph Amaral, adding that the hospital has started $70 million in improvements.

Issue Date: December 28, 2001 - January 3, 2002