IN GOOD HEALTH
New Landmark chief says transition to non-profit status won’t affect services
WOONSOCKET – Landmark Medical Center’s new president says the hospital’s owner hasn’t ruled out making some level of payment in lieu of taxes to the city if the hospital is switched to nonprofit status.
As nonprofits, Landmark and the Rehabilitation Hospital of Rhode Island in North Smithfield would become exempt from taxes, but President and CEO Michael Souza said, “We want to make sure the city is running well. We of course want to work with the city and see what we could do.”
The former president of the Hospital Association of Rhode Island’s comments came just hours after he formally assumed the position of CEO and president of Landmark and the affiliated rehab hospital on Eddie Dowling Highway on Monday. Souza acknowledged that Prime’s proposal to donate the facilities to its charitable arm, the Prime Healthcare Foundation, had put a strain on relations with the city, but Souza said, “I think we can build that relationship back up.”
Mayor Lisa Baldelli-Hunt says Prime’s petition for change of ownership, pending before the Rhode Island Department of Health, jeopardizes about $1.6 million annually that Landmark pays the city in taxes on real estate and medical equipment.
North Smithfield is facing similar prospects, albeit on a smaller scale. A spokeswoman for the tax assessor in
North Smithfield says Prime pays the town $252,687 a year in taxes on real estate and medical equipment, making it the town’s fifth-largest taxpayer, behind Lowe’s and Walmart. The top taxpayer is Narragansett Electric and secondplace goes to the Slatersville Mill apartment complex.
Though he didn’t elaborate, Souza also suggested that Prime could propose certain “public health initiatives” to compensate for possible rollbacks in tax revenue.
Neither the city nor the town of North Smithfield would be cut off completely if the Rhode Island Department of Health approves Prime’s application to donate the hospitals to its charitable foundation, a gift regulators regard as change of ownership. If DOH permits the transfer, a law governing nonprofit health care facilities would require the state to reimburse their host communities 27 percent of their assessed tax liability, according to Souza.
No matter what happens, he said, patients would see no difference in the delivery of health care services.
“Whether it’s nonprofit or forprofit, the hospital still runs the same way,” he said.
Souza succeeds former president and CEO Richard Charest, who retired in February. He has more than 20 years of experience in hospital administration, including a stint at Landmark that lasted from January 2001 to March 2007 and primarily involved the financial administration of the hospital.
He says his chores at HARI largely involved lobbying for the legislative interests of its members, which helps explain why former Senate President Teresa Paiva Weed is Souza’s successor. She is expected to take over as president of HARI in May.
Asked whether he’s excited about returning to Landmark, Souza said, “I am. I did spend six years here, and I know the community. I know lots of the people who work here.”
“I can do the political piece, but it’s not really where my drive is,” added Sousa., “My drive is more the financial piece.”
Souza arrives at Landmark and RHRI as the facilities are poised for major changes that Souza believes will strengthen their position in the local healthcare market and enable them to better serve area residents. In addition to Prime’s petition for change of effective control, Prime proposes investing more than $11 million to establish a Level III Trauma Center at Landmark, a move that will require substantial renovations to the emergency room.
Most emergency rooms in the area do not have a rating from the American College of Surgeons, though Rhode Island Hospital operates a Level 1 Trauma Center in Providence, a destination for the victims of the worst kinds of trauma. Bringing a Level III trauma center would draw more patients from south-central Massachusetts to Landmark for stabilization prior to transfer to facilities where more sophisticated care is offered and lead to more hospital admissions, according to Souza.
As for Prime’s application for change of ownership, Souza said Prime has been donating for-profit hospitals within the chain to its nonprofit foundation at the rate of one facility per year – a practice Prime President Prem Reddy sees as part of the corporation’s charitable responsibility. In certain demographic areas, including Greater Woonsocket, such donations can work in favor of patients because nonprofit hospitals have more leverage to tap government and philanthropic resources from which they can benefit.
For example, Souza said, as a nonprofit, Landmark would be empowered to participate in the federal program known as 340B, offering discount prescriptions to Medicaid patients. In the general locus of the hospital, which has a relatively high concentration of Medicaid recipients, that could be a substantial perk for many of the hospital’s patients.
“You’ve got to have a large Medicaid population to qualify,” said Souza. “Landmark does.”
Switching to nonprofit status would also help Landmark with physician recruitment, according to the new president. As a for-profit hospital, Landmark is presently precluded from arranging for the repayment of outstanding student loans of new medical recruits, but that would change if Landmark were a nonprofit hospital, Souza said.
Various public and private grants would also be within the hospital’s reach if it were a nonprofit facility – revenue sources that are not available now because Landmark has been a for-profit hospital since Prime acquired the facility in 2013.
A native of New Bedford, Souza earned his bachelor’s degree from the University of Massachusetts at Dartmouth, and a master’s in management from Bridgewater State College in Bridgewater, Mass. He presently lives in Dartmouth with his family.
He says he expects to spend most of his time in the near future meeting “lots and lots of people” as he reacquaints himself with hospital operations in the era of Prime, a 44-hospital chain based in Ontario, Ca.
“Whether it’s nonprofit or forprofit, the hospital still runs the same way.”