Care New England, Southcoast call off merger

Owners of Women & Infants, St. Luke's say they're 'parting on amicable terms'

Care New England's Women & Infants Hospital, top, and Southcoast Health's Charlton Memorial.
Care New England's Women & Infants Hospital, top, and Southcoast Health's Charlton Memorial.

PROVIDENCE, R.I. (WPRI) – Care New England Health System and Southcoast Health System announced Monday they have called off their proposed merger, abandoning a proposal that would have led to a major shakeup in Southern New England’s health care sector.

The two not-for-profit organizations “have come to recognize that their visions for the combined system could no longer be achieved” but “are parting on amicable terms,” they said in a joint statement Monday. No specific details were provided.

The proposed tie-up was first announced last November, and the two groups’ boards had voted to move ahead with the deal last spring. But in July Rhode Island officials rejected their request for an expedited regulatory review, and a full application was never filed. A union representing nurses has sharply criticized the proposal.

A merger of Providence-based Care New England and New Bedford-based Southcoast would have created one of the largest nonprofit health systems in New England, with eight hospitals, roughly $2 billion in annual revenue and more than 1,700 doctors and providers, according to the two groups. Care New England is also affiliated with Brown University’s medical school.

Care New England, Rhode Island’s second-largest hospital group and the parent of Women & Infants, has faced financial challenges partly due to its 2013 takeover of Pawtucket’s troubled Memorial Hospital. Its other hospitals are Butler and Kent.

“Care New England has worked strenuously in the past year to improve its financial position and its programmatic excellence,” Care New England President and CEO Dennis Keefe said in a statement. “Over the coming months, we will reassess the local environment and, in working with our Board, our physicians and management team, determine our strategic plans for the future.”

“I believe we are poised for a strong future,” Keefe added.

Before announcing the deal with Southcoast, Care New England confirmed talks with three other potential partners: Rhode Island Hospital parent Lifespan, with whom it’s had on-again off-again merger discussions for years; Partners HealthCare of Boston, which owns Mass General and Brigham and Women’s; and Prospect Medical Holdings, whose Rhode Island division includes Roger Williams Medical Center.

Care New England was projected to post a net loss of $60 million in the 12-month fiscal year that ended Sept. 30, according to a recent set of financial forecasts put together for its bondholders. Revenue was projected to total nearly $1.2 billion. The company recently said it has about 7,500 employees, making it Rhode Island’s fourth-largest employer.

Under the terms of the merger proposal, Southcoast President and CEO Keith Hovan had been slated to become president and CEO of the new merged health system, while Keefe would have run the new system’s population health initiative. The new company’s headquarters was expected to be in Massachusetts.

Southcoast was created in 1996 through the merger of three community hospitals in Southeastern Massachusetts: Charlton Memorial in Fall River, St. Luke’s in New Bedford and Tobey in Wareham. Southcoast at one time explored a possible Rhode Island merger with South County Hospital, but abandoned those talks in 2014.

“Southcoast Health is fortunate in that we are well positioned in all aspects to confidently move forward,” Hovan said Monday.

SEIU District 1199NE, the largest union of Care New England employees, had been critical of the proposal and appeared to welcome the news Monday.

“Since this process began, our members have had many legitimate questions about what the impact of the proposed merger would have been on the vital services that we provide, especially given the fact that the new entity would have been headquartered out of state,” Patrick J. Quinn, the union’s executive vice president, said in a statement.

“We will remain vigilant to review any future proposed mergers,” Quinn added.

Ted Nesi ( covers politics and the economy for He writes The Saturday Morning Post and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram