Partners holding off on Care New England takeover due to financial concerns

PROVIDENCE, R.I. (WPRI) – A top executive at Partners HealthCare said the company is holding off on finalizing its proposed takeover of Rhode Island’s No. 2 hospital group, Care New England, until a viable turnaround plan is in place.

Partners Chief Financial Officer Peter Markell told the Boston Business Journal the two sides are expected to meet in late September or early October to decide whether the deal can proceed. Care New England has lost $46 million so far this fiscal year, and recently had its bond rating downgraded.

“The devil is in the details in the assumptions, but we’d like to see them showing us pretty near-term breakeven, and getting to a 1 to 2 percent margin within three years or so,” Markell told the business paper.

Care New England is looking to execute a two-step process, first by selling its money-losing Pawtucket facility Memorial Hospital to Prime Healthcare, then by merging its other three hospitals – Women & Infants, Kent and Butler – with Partners. Lawmakers recently enacted a new measure to speed up the Memorial transaction.

Both proposed deals were announced four months ago.

Meanwhile, Rhode Island’s biggest hospital group – Lifespan – is waiting in the wings to potentially swoop in and acquire Care New England should the Partners deal fall flat, after failing in previous attempts to consummate a merger. Lifespan CEO Timothy Babineau said earlier this year he told his Care New England counterpart, “My door is always open.”

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