OpEd: It’s Time to Innovate in Healthcare

Would you continue investing in a business that continuously loses money, repeatedly seeks higher revenues to stay afloat, yet refuses to redesign its operating model? We’re describing our healthcare system, and in particular, its hospitals. Employer-based commercial insurance premiums in Rhode Island increased by some 20% in 2026, the Medicaid budget for the State is an ever-increasing burden on taxpayers, and potential reductions in federal support for Obamacare and Medicaid are sure to worsen an already untenable financial strain. Everyone is searching for solutions, and there are promising alternatives available to consider.

Hospital services represent one of the largest components of healthcare spending and commercial insurance premiums in Rhode Island. At the same time, study after study has shown that strong primary care systems lower costs by preventing disease, managing chronic illness earlier, and reducing avoidable hospitalizations. Yet our healthcare payment system continues to reward expensive hospital admissions and procedures more than prevention and community-based care. As a result, independent primary care practices are disappearing, while many remaining physicians are absorbed into hospital systems still operating under the old business model of filling beds and increasing procedural volume. Patients with chronic illnesses too often experience a revolving door of costly hospital admissions and unsatisfying discharges. That approach is expensive for employers, taxpayers and families — and it is proving financially unsustainable for hospitals themselves.

Independent primary care groups have demonstrated major cost savings when given the freedom and resources to care for this population. Accountable care organizations, shared-risk contracts, value-based payment systems, hospital global budgets and similar models have shown promising results by changing financial incentives away from doing more procedures in expensive settings and toward prevention, coordination and community-based care. Maryland is already experimenting with these approaches and has demonstrated reductions in hospital utilization and costs. Federal programs such as AHEAD are intended to encourage coordinated efforts among primary care providers, hospitals and insurers to innovate and develop better approaches to patient care. Importantly, the AHEAD model includes additional financial support for both hospitals and primary care physicians, but primary care providers cannot fully benefit unless hospitals agree to participate in the model.

Rhode Island has a long tradition of innovation, stemming from its unique size, demographics, geography and educational institutions. We implore our state leaders to enact legislation to achieve the following:

1. Allocate meaningful, game-changing funding to primary care, focusing on independent practices, FQHCs and community clinics.
2. Mandate that all Rhode Island hospitals and their provider groups participate in the AHEAD program.
3. Compel commercial insurers and Medicaid to redirect resources from inpatient chronic disease care toward community-based prevention and management, including through the Rural Health Transformation Project.
4. Begin a statewide discussion among hospital leadership, trustees, business and community leaders on the need for a new vision for hospital services. National healthcare consulting firms increasingly argue that hospitals must redesign their business models to become financially sustainable while improving affordability and health outcomes.