PROVIDENCE, R.I. (WPRI) – Care New England said Thursday it is moving ahead to finalize its proposed merger with Boston-based Partners HealthCare, the largest hospital group in Massachusetts, doubling down on a deal that could reshape the health care sector in Rhode Island.
The two sides said their boards have agreed to enter into a definitive agreement, which they described as “an important milestone” and “the next step in the process for CNE to become part of Partners HealthCare.” The decision comes just days before their exclusive negotiating period was set to expire.
Care New England, Rhode Island’s second-largest hospital group, owns Women & Infants, Kent and Butler. “Our lengthy discussions and due diligence with CNE have strengthened our relationship and further solidified our interest in building on the successful clinical collaboration we have already developed together,” Dr. David Torchiana, Partners’ president and CEO, said in a statement.
CNE and Partners first announced plans to merge last April, then spent the last 10 months conducting due diligence and sorting out the future of Memorial Hospital, which CNE is now closing. The latest announcement comes just two weeks after Brown University’s president proposed an alternative plan for a takeover of Care New England by the Ivy League school and Prospect Medical Holdings, arguing the Partners deal would be bad for Rhode Island.
In an apparent reference to Brown’s concerns, Torchiana said Partners executives are “also aware of and deeply respectful of the other components of the Rhode Island health care landscape and hope to find common ground and mutually beneficial pathways to improve the academic strength of the hospital programs and maximize the benefit to the Rhode Island economy.”
In a statement Thursday, Brown officials said they “look forward to learning about the details of the proposed acquisition.” They also said, “As Rhode Island regulators assess the plan, we urge them to analyze the impact on access to health care, the cost of medical care, and jobs and economic development in Rhode Island, and consider whether a local option would better serve the residents of the state.”
Thursday’s announcement does not mean Care New England and Partners are done negotiating. The two companies will now begin nailing down the terms of the definitive agreement, described as “a more formal document that would outline the details and plans for the actual transaction.” They did not provide a timeline for getting that done, but said they hoped it would be completed “as soon as possible.”
Once a definitive agreement is signed, the two companies would need to seek regulatory approval for the transactions from Rhode Island, Massachusetts and federal officials.
“While we still have much more work ahead of us, we are one step closer to realizing a unique clinical affiliation that would place Rhode Island at the forefront of health care delivery both locally and beyond,” Charles Reppucci, chairman of Care New England’s board, said in a statement.
Brown isn’t the only major Rhode Island organization watching the negotiations closely. “The potential acquisition of Care New England by Boston-based Partners HealthCare would greatly impact the state’s health care landscape,” Dr. Timothy Babineau, CEO of Lifespan, the state’s top hospital group, said Thursday.
“As we’ve said many times before, we welcome the opportunity to work with like-minded organizations who share our values and vision for an academic-based, comprehensive health care system that provides care close to where patients live and work,” Babineau said. “Regardless of CNE’s future, Lifespan will continue to work tirelessly to remain the preferred health care provider as well as a vital economic engine to the state.”
Gov. Gina Raimondo, whose administration will have to decide whether to approve the Partners deal through the Department of Health, said Friday she has spoken to Brown President Christina Paxson about her concerns.
“I have to be a little careful, because we’ll be the regulator in this ultimately,” Raimondo said during an interview on WPRI 12’s Newsmakers. “Here’s what I would say: I wouldn’t support any plan that I thought would take care out of Rhode Island and bring it to Boston. So I would get behind a plan that says, care stays local. Rhode Islanders shouldn’t have to go to Boston for routine care.”
“It would be hard for me to get behind anything where I thought at the end of the day jobs go to Boston, health care goes to Boston, specialty care goes to Boston,” Raimondo added. “I know she’s put forth a competing proposal to the Partners proposal, and we’ll be looking at both of them along the same lens.”
Care New England is one of Rhode Island’s largest employers and most important health providers, but it has been under financial strain, having lost more than $100 million over the last two fiscal years. The company made an aborted attempt to merge with Southcoast Health System of New Bedford in 2016 before deciding to try and join forces with Partners last spring.
Patrick Quinn, executive vice president at the SEIU 1199 union that represents some Care New England workers, gave a muted reaction to the merger news. “Any plan for a health system to merge must ensure access to high-quality health care for Rhode Island patients and good jobs for hospital workers,” he said.
Chris Callaci, general counsel of the United Nurses and Allied Professionals union, gave a more positive response, saying its members are “heartened” that the deal would “prevent Prospect Medical Holdings from increasing its presence in Rhode Island for the time being.” His comment reinforced the union’s strong distaste for Brown’s proposed collaboration with the California-based for-profit, which already owns Roger Williams Medical Center and Fatima Hospital.
Partners was founded in 1994 by two powerhouse Massachusetts hospitals, Brigham and Women’s and Mass. General, and has close ties to Harvard Medical School – a key concern for Brown. It now owns multiple additional hospitals as well as other medical facilities, employs roughly 73,000 workers, and posted total operating revenue of more than $13 billion in 2017.
Partners and Care New England say they’ve had a “close working relationship” since 2009, when they established a clinical affiliation through Brigham and Women’s.