PROVIDENCE, R.I. (WPRI) – In a shock announcement that further scrambles the outlook for Rhode Island’s biggest hospitals, Lifespan revealed Tuesday it is joining the merger talks between Care New England and Partners HealthCare.
“Care New England and Partners HealthCare have approached Lifespan and will begin formal discussions to explore how all three health care providers might work together to strengthen patient care delivery in Rhode Island,” the companies said in a brief joint statement.
Care New England is Rhode Island’s No. 2 hospital group and the parent of Women & Infants, while Partners is the largest hospital group in Massachusetts. They announced plans to merge last April, and have been in the process of negotiating a definitive agreement to flesh out the terms of the deal.
Lifespan – which has made multiple failed efforts to merge with Care New England in years past – owns Rhode Island Hospital and other facilities. The two companies are Rhode Island’s two largest private employers, with more than 20,000 workers combined. Their combined annual revenue is more than $3 billion.
“By combining the talent, experience and resources of our like-minded, provider-based organizations, we envision creating a national model that fully leverages the integration and coordination of care,” the companies said. “In doing so, we are better equipped to meet market challenges and mandates to improve outcomes while reducing health care costs.”
The talks appear to be at a very preliminary stage. The statement offered no details on what the executives at the three companies envision as possibilities, such as a three-way merger or the potential spinoff of one or more hospitals between the organizations.
Spokesmen for Lifespan and Care New England declined interview requests.
Employees were being briefed on the news this afternoon. Lifespan President and CEO Dr. Timothy Babineau and Care New England President and CEO Dr. James Fanale sent identical emails to their staffs informing them of the announcement.
“As health care professionals, we are aware of the industry’s constant and growing pressures to evolve and do so quickly,” they wrote. “From frontline caregivers to operational staff, we are challenged daily to work smarter to not only provide world-class care to our patients but advance medicine as a whole. With these challenges have come innovation, creativity and opportunity.”
“Regardless of the outcome from these conversations, we will remain focused on our mission,” they added.
Gov. Gina Raimondo welcomed the announcement. “It’s great to see another local, homegrown Rhode Island institution joining this collaboration,” she said in a statement. “Whatever the proposal, I am focused on making sure costs to Rhode Islanders don’t increase and that medical care, research and teaching all stay in-state.”
The Care New England-Partners deal has caused concern locally about the possibility of one of the state’s major hospital groups coming under out-of-state control. Brown University recently teamed up with Prospect Medical Holdings, the California-based owner of Fatima Hospital and Roger Williams Medical Center, to put forward an unsolicited alternative bid for Care New England.
Brown joined forces with Prospect after Lifespan spurned the school’s efforts to get it involved in the crafting of an alternative offer. In a statement, Brown President Christina Paxson said Tuesday evening the university’s leaders are “encouraged” by the Lifespan announcement, “and we hope to be included in these discussions.” She said Brown has been advocating such collaboration “for years.”
“We continue to be concerned about the impact of the acquisition of Care New England by Massachusetts-based Partners – and now a possible business relationship between Partners and Lifespan – on the cost of and access to health care in the state,” Paxson said.
“Previously, we have noted that the acquisition of Care New England by Partners could undermine competition in the healthcare market and lead to higher healthcare costs,” she said. “A business relationship between Partners and Lifespan that further consolidates market power could have additional adverse effects on Rhode Islanders.”
Ray Sullivan, a spokesman for the United Nurses and Allied Professionals (UNAP), said the union was “curious to see what develops” in the newly expanded talks. “Lifespan’s involvement in this proposed merger is significant and must be given serious consideration,” he said.
“We hope it helps end the ill-thought effort between Prospect Medical Holdings and Brown University to break up Care New England,” Sullivan added – reinforcing once again how sour the union’s relationship with Prospect remains.
The Lifespan announcement came just hours after another local hospital, South County Hospital, disclosed it has ended preliminary merger discussions with Yale New Haven Health System, the Connecticut-based company that took over Westerly Hospital in 2016.Ted Nesi (firstname.lastname@example.org) 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