Partners yanks bid for CNE as Raimondo orders new merger talks with Lifespan

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Partners yanks bid for CNE as Raimondo orders new merger talks with Lifespan

PROVIDENCE, R.I. (WPRI) — Rhode Island’s hospital industry was thrown into fresh turmoil Tuesday as Democratic Gov. Gina Raimondo ordered a new round of merger talks between Lifespan and Care New England, leading Partners HealthCare to withdraw its application to take over CNE.

Raimondo’s office said she has asked the leaders of Lifespan and Care New England — along with Brown University, whose medical school is affiliated with both hospital groups — to work quickly over the summer to determine if they see a joint path forward. The Rhode Island Foundation and the Partnership for Rhode Island, a group made up of top local CEOs, will pay for consultants to assist.

The heads of Lifespan, Care New England and Brown all confirmed they would begin discussions soon. The three powerful institutions employ tens of thousands of people in Rhode Island and provide care for hundreds of thousands of patients. They are also key to the state’s economic development strategy.

“We are confident that with the good faith efforts of all the parties involved, we will finally achieve the vision of unified academic health care system for the state of Rhode Island that will have a positive impact on patient care and our economy for years to come,” Lifespan President and CEO Dr. Timothy Babineau said.

Raimondo’s dramatic intervention shows she has grown wary of letting CNE’s three hospitals — Women & Infants, Kent and Butler — become outposts of Partners’ sprawling Boston-based empire, anchored by Brigham & Women’s and Mass. General.

“Over the past several months I have increasingly heard from a number of stakeholders and understand the appeal of a locally run, academic medical center based in Rhode Island,” Raimondo said in a statement. “With that in mind, I have called on Care New England, Lifespan and Brown to sit down once again and consider a joint solution.”

“While I have little control over private hospital systems, I do have the ability to bring these parties together and ask them to reconvene negotiations on a crucial decision that will impact all Rhode Islanders for decades,” she said.

Speaking to reporters at the State House later Tuesday, Raimondo said she believes the state is at “a moment in time” that could allow a Lifespan-Care New England combination to work despite the failure of two previous attempts.

“My assessment is that the parties are ready in a way they haven’t been before and I’ve decided to step up and take an active role and say to these parties, get to the table and see if you can get this done for Rhode Island,” she said.

Dr. Anne Klibanski, the interim president and CEO of Partners, indicated her company would step back from Rhode Island for the time being.

“In order to give this effort the best possible chance for success and to provide maximum flexibility to the governor and the leadership of these three institutions, we will be withdrawing our application to acquire CNE,” Klibanski said in a statement.

Still, both the governor and Klibanski left the door open to a future role for Partners in Rhode Island. Partners had previously engaged in three-way negotiations with Lifespan and Care New England last year, but those broke off when the parties couldn’t reach an agreement.

“We are pausing to give us some time and some space locally to see if we can get ourselves integrated first and then [Partners executives] are, I believe, ready, willing and able to reengage whenever we say we’re ready,” Raimondo said.

Klibanski added that Partners executives “look forward to reengaging at the appropriate time — especially with a fully integrated local system.”

Raimondo’s move comes as Lifespan executives, backed by some outside civic leaders in Rhode Island, have been aggressively making the case that the state would be better-served by combining the state’s two major hospital groups into one dominant player that would control upwards of 80% of the medical sector.

The governor’s announcement is just the latest twist in a years-long battle over the future of Care New England, which has been under increasing financial strain throughout this decade, partly due to its ill-fated 2013 acquisition of since-shuttered Memorial Hospital in Pawtucket.

Partners first announced plans to acquire CNE back in April 2017, but the process had moved slowly, partly due to initial uncertainty over the future of Memorial, which finally closed at the end of that year. The takeover application had been before Raimondo’s Department of Health and Attorney General Peter Neronha’s office, but they had not yet deemed the paperwork complete and begun the formal review.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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