PROVIDENCE, R.I. (WPRI) – Care New England President and CEO Dennis Keefe said Monday he is “confident” the company will be able to consummate its merger with Partners HealthCare, a week after a top Partners executive noted concerns about the finances of Keefe’s organization.
In a memo to staff, Keefe said he felt “compelled to provide some more information and context” after Partners’ chief financial officer told the Boston Business Journal his company was holding off on finalizing its proposed takeover of Care New England until a viable turnaround plan is in place.
“I remain confident we will be able to meet Partners’ expectations and perhaps exceed them,” Keefe wrote, while acknowledging he is “constrained in providing highly specific details.”
Keefe confirmed that Partners wants Care New England to break even on its operations by the end of its next fiscal year on Sept. 30, 2018, and to be running an operating profit of 1% to 2% within three years. The company is currently on track to lose about $61 million by the time the current fiscal year ends next month.
“In short, they want us to be a fiscally viable, and ultimately, a fiscally strong organization,” Keefe wrote, adding, “Why wouldn’t they?”
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.
In Monday’s memo, Keefe said Care New England is “making progress” on various efforts to improve its finances, and noted that Memorial will no longer be weighing down the organization once it’s spun off to Prime.
“Partners is working very closely with us to ensure we continue to understand their expectations, but also to be helpful in every way possible,” Keefe wrote. “I personally believe they really want us to succeed and are energized by the possibilities of adding Care New England to their system.”
“However,” he added, “our performance needs to be real and sustainable, something we have always clearly understood.”
Separately, Care New England spokesman Jim Beardsworth pushed back at speculation that the company could wind up in the arms of Lifespan, Rhode Island’s biggest hospital group, if the Partners deal doesn’t go through. Lifespan CEO Timothy Babineau said earlier this year his message was, “My door is always open.”
“I would just say that we certainly appreciate that, but that does run contrary to actions in the past, when meetings have been either canceled or postponed or never come to realization,” Beardsworth told Eyewitness News.
“I think it’s important that we, as Care New England, focus on where we are in the process that we’re in,” he continued. “Reporting and coverage and the expectation that Lifespan is waiting in the wings – when in fact the overtures made didn’t even really get up to the level of a full proposal – I think we have to be very careful of assuming that.”
Lifespan spokeswoman Jane Bruno disputed Beardsworth’s comments. “Just to set the record straight, there has never been a meeting that has been postponed or cancelled,” she said in an email.
Jared Pliner contributed to this report.