3 months later, Care New England and Partners still working on merger deal

PROVIDENCE, R.I. (WPRI) – Three months after Partners HealthCare announced plans to take over Rhode Island’s No. 2 hospital group, Care New England, the two sides say they are still hammering out the details.

When the Partners deal was announced on April 19, Care New England President and CEO Dennis Keefe told reporters he hoped the companies could complete the financial and legal due diligence necessary for a definitive agreement within two or three months – though he was quick to add, “don’t hold us to these timelines.”

In a joint statement this week, Care New England spokesman Jim Beardsworth and Partners spokesman Rich Copp told Eyewitness News the deal is still on track, even as the negotiations continue into a fourth month.

“We continue to work closely on very thorough, detailed and important due diligence,” they said. “While time consuming, this continues to allow for information sharing and a critical exchange of questions and answers that further this process.”

“The fact that this effort takes a careful approach, and therefore an extended period of time, should be of no surprise as both parties remain focused and committed to the previously announced affiliation plans,” they continued.

In a follow-up email, Beardsworth declined to speculate on how much longer it will be before the two companies have a definitive agreement.

Care New England, whose hospitals include Women & Infants and Kent, has been under increasing financial pressure and lost $40 million in the first six months of its current fiscal year. A previous merger attempt fell apart last October, when it scrapped a deal to join forces with Southcoast Health System of New Bedford.

In choosing Partners, Care New England spurned a competing bid from Lifespan, the owner of Rhode Island Hospital and the state’s largest hospital group. However, during a July 13 interview on Executive Suite, Lifespan President and CEO Tim Babineau indicated he would still be open to a deal if the Partners transaction runs aground.

“The merger has always made sense – it continues to make sense,” Babineau said. “I’ve been very public about saying that I believe a merger between Care New England and Lifespan would be good for patients, would be good for the state, would be good for the economy, would be good for health care.”

Babineau added, “I’ll tell you exactly what I told Dennis when he called me to say they’re going to go in a different direction – I told him, ‘You know, my door is always open.'”

Separately, Care New England has also announced plans to spin off long-struggling Memorial Hospital in Pawtucket to Prime Healthcare Foundation, a nonprofit affiliate of the same group that purchased Landmark Medical Center in Woonsocket in 2012.

Gov. Gina Raimondo signed a law this month to speed up the regulatory review process for Prime to take over Memorial. The two companies have not yet filed a formal application for state officials to take up the proposal.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook