From the dozen suitors that came courting after Care New England and Southcoast Health System broke off merger talks in January, CNE has signed a letter of intent to be acquired by HealthCare Partners of Boston.
The announcement made Wednesday morning prompted a range of questions from what the combined entity would be named and how it would be governed to what it will mean for health care and to Lifespan that runs Rhode Island Hospital, the state’s largest hospital.
The proposal that will require regulatory approvals is actually two proposals. Memorial Hospital in Pawtucket, which is part of the CNE, would be sold to Prime Healthcare Foundation of California, which also operates Landmark Medical Center in Woonsocket, while the remaining CNE institutions including Kent in Warwick would join with Partners.
In a conference call, CNE Board Chair Charles R. Reppucci said he is enthusiastic about the proposal and its ability to reduce costs and enhance services. He also pointed out that CNE has worked “successfully” with Partners for many years.
CNE has maintained a close working relationship with Partners HealthCare since 2009 through a clinical affiliation with Brigham and Women’s Hospital (one of the founding members of Partners) in cardiology and vascular, thoracic and colorectal surgery. In addition, there has been a longstanding collaborative and collegial relationship between McLean Hospital (a Partners hospital) and Care New England’s Butler Hospital to provide high-quality behavioral health care and innovative research locally within the Rhode Island community.
CNE president and CEO Dennis Keefe envisions opportunities for cost reductions simply because of the size of the overall organization. But there’s more to it. Though a continuum of care, the effort would be to “root out a lot of waste” and reduce duplication of services.
Keefe sees an opportunity for growth, including increased employment as the system looks to move away from a fee for service model to “population health.”
The aim is better coordinated health care through electric information systems that would reduce the number of tests required and improve communications.
Asked if this might impair Lifespan, Keefe said, “We will be competing in the way we should be competing.” He also expects there to be cooperation between the two.
In a memo to employees that included press releases on Partners and Prime, Keefe wrote, “As we have persevered in this effort to seek long-term stability and opportunity, we have continually struggled to right our ship in the face of challenging economic adversity, dramatic shifts in service line volume, and perhaps most difficult, some of the most stringent state-imposed insurance reimbursement caps in the country.”
He continues to say he would share information as the process unfolds, concluding, “I look forward to the continued work ahead with our colleagues from both Partners and Prime. Ultimately, it is this work that will lay the foundation for the future successes of our organization, our patients, and all those who help make CNE great each and every day.”
Partners HealthCare is an integrated health system founded by Brigham and Women’s Hospital and Massachusetts General Hospital. In addition to its two academic medical centers, the Partners system includes community and specialty hospitals, community health centers, a physician network, a managed care organization, home health and long-term care services, and other health-related entities. Partners is one of the nation’s leading biomedical research organizations and a principal teaching affiliate of Harvard Medical School. Partners HealthCare is a non-profit organization.
According to the announcement, the letter of intent sets forth a process to negotiate a transaction pursuant to which CNE will become part of Partners. Both organizations will continue to work together as the process moves into the next phase – developing and signing a definitive agreement. Following this phase, it is expected the organizations would move forward with the needed state and federal regulatory approvals. Keefe estimated the due diligence process on the part of Partners and CNE could take two to three months with another two to three months for the regulatory process.
The LOI announced today includes Kent Hospital in Warwick; Women & Infants’ Hospital of Rhode Island in Providence; the VNA of Care New England, based in Warwick; Butler Hospital in Providence; and The Providence Center in several Rhode Island locations. Under the proposal, the strong educational and research relationship that CNE has fostered with Brown University will continue to play a critical role in the health care landscape and its future development.
“As health reform here and across the nation evolves, providers are developing more regional strategies and this affiliation between Partners and Care New England is a natural step in that evolution. However, despite the many changes in health policy, one constant has always remained – at the heart of all our efforts is the patient,” said Partners HealthCare President and CEO David Torchiana, MD said in a statement.
In response to the announcement, Patrick J. Quinn, the executive vice president of SEIU District 119NE, said in a statement, “It is important that any proposed hospital merger ensures the continued provision of quality care for Rhode Islanders, safe staffing levels in our hospitals, and good jobs for health care workers. We will evaluate this proposal fully as more details become available, and our members will be fully engaged in the regulatory review process outlined in Hospital Conversion Act in order to continue advocating for the hospitals that our communities deserve.”