RI lawmakers take aim at Care New England-Partners hospital merger

PROVIDENCE, R.I. (WPRI) – Two prominent Rhode Island lawmakers are set to introduce legislation that would put more regulatory hurdles in the way of a merger between Care New England, Rhode Island’s second-largest hospital group, and Massachusetts giant Partners HealthCare.

State Sen. Lou DiPalma and state Rep. Kenneth Marshall, who are the vice-chairs of the Finance Committee in their respective chambers, said Thursday they are putting the finishing touches on a bill that would strengthen the Hospital Conversion Act, or HCA. The 1997 state law already sets out an extensive approval process for changes in hospital ownership.

DiPalma, D-Middletown, and Marshall, D-Bristol, said they are concerned about the proposed acquisition of Care New England by Partners, the owner of hospitals including Brigham and Women’s and Massachusetts General. (Care New England’s are Women & Infants, Kent and Butler.) The two companies are currently negotiating a definitive merger agreement, and last week they announced Rhode Island’s largest hospital group – Lifespan – was also joining the talks.

“We have never seen a proposal where one of Rhode Island’s largest hospital systems would be acquired by a hospital network that is located in a state adjacent to Rhode Island,” DiPalma said in a statement. “The potential for patients, jobs and services to migrate to Massachusetts is a serious concern.” He added, “This proposal presents a unique risk to Rhode Island’s hospitals and health care system.”

“My concerns related to patient migration are not just based on Partners attempting to drive patients to Boston,” Marshall said, suggesting “the problem might just be 20 minutes up the highway in Foxboro where Partners has a large full-service hospital at Patriot Place providing both outpatient and inpatient surgical services.”

The two legislators’ comments echoed those of Brown University President Christina Paxson, who has emerged as the most vocal critic of the proposed CNE-Partners tie-up, partly due to concerns about how it would affect her institution’s medical school. Paxson has partnered with Prospect Medical Holdings, the California-based owner of Roger Williams Medical Center and Fatima Hospital, on an alternative takeover bid for Care New England.

Among other provisions, the DiPalma-Marshall bill would direct state regulators at the R.I. Department of Health – who share final say on hospital mergers with the attorney general – to scrutinize how the transaction would affect primary and specialty services, patient migration, health care jobs, Medicaid costs, insurance premiums and academic medical programs.

The bill would also block an expedited review of any merger involving a hospital system in Massachusetts or Connecticut.

“This isn’t something we want to rush into,” DiPalma said. “I don’t see any scenario where I could support an expedited review involving two of Rhode Island’s largest employers.”

Marshall added, “This is not a time for expediency, this is a time for caution.”

The new proposal comes less than a year after state lawmakers made an opposite move, passing a law to speed up the review of Care New England’s proposed sale of Memorial Hospital to Prime Healthcare Foundation. That deal fell apart in September, leading CNE to close Memorial – frustrating the legislators who’d voted to support the transaction just months earlier.

Jim Beardsworth, a spokesman for Care New England, declined to comment directly Thursday on the DiPalma-Marshall bill, but he defended the Partners deal.

“CNE firmly believes its efforts represent an opportunity to further strengthen care locally, while providing expanded and more complex care here in Rhode Island, something already demonstrated with our cardiology affiliation with Brigham and Women’s,” he said in a statement. “Our proposed plans with Partners represents a positive step forward in health care furthering our commitment to the best possible care for our patients locally.”

A spokesman for Partners did not respond to a request for comment.

Unsurprisingly, Brown and Prospect welcomed the new legislation.

“It’s encouraging to see that the principles outlined for this legislation appear aligned with addressing issues that are important for preserving quality health care in Rhode Island,” Brown spokesman Brian Clark said in an email. “We look forward to taking time to review the details of the legislation after it is introduced.”

Bill Fischer, a newly hired spokesman for Prospect’s Rhode Island division CharterCARE, said the effort represents “good public policy.”

“Since CNE’s proposed acquisition by Partners was announced, access to health care has been lessened and a loss of health care jobs in Rhode Island has already occurred,” Fischer said. “The closure of Memorial Hospital and more recently the announced closure of CNE’s Diamond Hill Road medical facility in Woonsocket, where women received obstetrics and gynecology services, are proof points of concern.”

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