Memorial Hospital Submits Application for Closure with RI Department of Health

Friday, November 03, 2017


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Memorial Hospital has submitted its application for closure to the Rhode Island Department of Health.

The filing advises the Department of Health that Memorial plans to end operations as a licensed inpatient hospital and requests the approval of the Director for the elimination of the Emergency Department and certain other services. The closure comes just weeks after Care New England (CNE) tried to sell Memorial to Prime Healthcare, but that deal fell through. Prime this week was fined $1 million by the RI Department of Health in an unrelated issue. 

“Today’s submission to the Department of Health represents a required and critically important step in the process Care New England carefully outlined recently. While we move forward with this difficult, yet necessary decision, we do so with compassion for those affected and the utmost respect for the legacy of care and community that Memorial has stood for throughout its history, while striving to ensure access to care throughout the service area,” said James E. Fanale, MD, EVP, chief operating officer and chief clinical officer.

Following the closure of the hospital, CNE intends to provide certain community-based primary and specialty care services in Pawtucket. But, CNE has not defined those services. CNE is at the breaking point financially and has lost nearly $120 million in the past two years. CNE has entered into an agreement with Partners HeathCare in Boston to sell the remaining hospitals and other assets to the Boston-based healthcare group.

The Application

According to the application, “At 9.3 percent occupancy, Memorial’s daily census has been significantly below capacity and below what is required to be financially viable. Due to service readiness, staffing, and operational requirements to meet licensure conditions, Memorial loses approximately $2 million per month. Given such under-utilization and unsustainable chronic financial losses, Memorial cannot continue to adequately staff and deliver patient care services in a clinically safe and financially viable manner and intends to cease all operations as soon as possible.”

The application further addresses employee support services during this transition to include, “… upcoming job fairs to be scheduled, and similar outplacement efforts. Memorial and CNE look forward to the continued assistance of, and plan to collaborate with, state and local leaders and other area medical facilities to find jobs for employees in non-CNE facilities if suitable positions are not available within CNE. CNE appreciates the current and ongoing efforts of Gov. Raimondo and other community leaders to secure commitments from other health system leaders to assist Memorial Hospital employees to find suitable employment following the closure of Memorial.”

Memorial’s Financial Issues

As was stated in Memorial’s plan to close was first announced, the reason for the changes include the chronic financial losses being incurred at Memorial, continuing a nearly 10-year slide, resulting in an operating loss in the past fiscal year of $23 million.

SNE recorded a $68 million loss from operations in the fiscal year 2016 and is projected to show a $49 million operating loss for the fiscal year that just ended on September 30.

Its plan to restore financial well-being to the health care system focuses in large part on the resolution of the ongoing losses at Memorial, which is not financially viable and is not projected to ever be viable.


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