Care New England posts $34M loss; execs cite costs of closing Memorial Hospital

Memorial Hospital in Pawtucket.

PROVIDENCE, R.I. (WPRI) – Care New England’s operations lost nearly $34 million during the final three months of 2017, as the process of closing long-struggling Memorial Hospital weighed on the company’s finances.

The company’s net loss for the three months that ended Dec. 31 was even larger, totaling $57 million, which executives attributed to accounting and other costs related to Memorial as well as pension changes. Memorial effectively ended hospital operations late last year, though some services remain on its campus.

On the plus side, Rhode Island’s second-largest hospital group said the rest of its operations were in the black during the quarter, eking out net income of about $200,000.

Jim Beardsworth, a spokesman for Care New England, said the quarterly earnings report “represents a continuing trend of operational and financial improvements.” It comes as the company is pursuing a planned merger with Boston-based Partners HealthCare, despite the objections of its academic partner, Brown University.

In an interview last month, Care New England President and CEO Dr. James Fanale suggested he could see a light at the end of the tunnel for the company once Memorial was shuttered, after more than $100 million in losses over recent years.

“Memorial is going to be a financial challenging throughout the year, because as we do the accounting for discontinuing operations we have assets that need to be written down, all sorts of accounting things are going to occur,” Fanale said. “So Memorial’s financial performance is not going to look well this year.”

“What we’re focusing on is the rest of Care New England – it’s in the black, and it’s going to be in the black,” he said. “I think we’ve turned the ship.”

Among Care New England’s other hospitals, Women & Infants’ operations also lost money for the quarter, ending $1.4 million in the red. Kent and Butler’s operations were both in the black, Kent by $2.8 million and Butler by about $500,000.

Care New England said more than 800 of the 1,800 employees in its pension plan agreed during the quarter to take lump sump payments rather than remain in the plan; payouts topped $52 million. The company also acknowledged its cash levels “will continue to be a challenge and will be actively managed.”

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He is a weekly panelist on Newsmakers and hosts Executive Suite. Follow him on Twitter and Facebook