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7 Implications and Unintended Consequences of a Care New England and Partners Merger

Thursday, April 20, 2017

 

As GoLocal first reported on Wednesday, the wheels are in motion for Partners Healthcare of Boston to merge, or it might be better described, as an engulfment of Rhode Island-based Care New England.

The reality is that a $12 billion in annual revenue, 800-pound gorilla from Boston has taken the first step to consume the financially troubled Care New England. 

This is not Care New England's first merger discussion -- in the past decade the hospital group has had failed efforts to merge with its rival Lifespan and South Coast.  Now, all eyes are on the potential merger with Partners.

READ BELOW: 7 Implications and Unintended Consequences of a Care New England and Partners Merger

The likelihood for the merger is far higher because Care New England has little leverage and an immediate need to find a partner with who has the resources to stabilize the group financially.

Hours after GoLocal broke the story, Care New England unveiled the deal.

“Today’s announcement represents the positive results of an extremely careful and deliberate process intended to ensure the best clinical, financial, and strategic direction forward for CNE,” said Board Chair Charles R. Reppucci. “While we are taking the first steps in this process, we do so with the utmost optimism and dedication to ensuring the successful completion of this affiliation with Partners which represents a unique and compelling opportunity in the advancement of Rhode Island health care delivery.”

GoLocal looks at some of the realities -- see the slides below.

 

Related Slideshow: 7 Implications and Unintended Consequences of a Care New England and Partners Merger

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Providence does not usually do well in mergers

Remember Providence Gas, Fleet Bank, and Narragansett Electric?

Big employers, deep community involvement, and significant charitable donors — all were consumed and in each case the number of employees left in Rhode Island by the succeeding company is a fraction of the once independent venture.

To the victor goes the spoils.

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As if the Boston economy isn't good enough, and the Providence economy couldn't be more stagnant

The cityscape of Boston is littered with cranes. Boston Business Journal maps the construction projects utilizing cranes in Boston (see image) and the number of projects is staggering. 

In Providence, there few construction projects and not a crane to be seen. The last thing Providence needs is for another one of its largest employers to be merged into a Boston mega-organization. The likelihood is that jobs will be lost or consolidated to Boston - basic functions like purchasing, accounting, etc. will be lost. 

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Harvard beats Brown in Ivy League match-up

Harvard Medical School is ranked as the #1 research-based institution in the America by U.S. News and World Report.

Partners Healthcare’s academic partner is Harvard.

In contrast, Care New England’s academic affiliation is with the Warren Alpert Medical School of Brown University. Brown’s best ranking is 21st for primary care - and is not ranked for research.

One of the biggest losers in the merger could be Brown's medical school.

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Care New England is RI’s 2nd largest employer, so what will It be in 2 Years?

According to the RI Department of Labor and Training, Care New England is Rhode Island’s second largest employer.

Lifespan is the largest: 12,050

Care New England: 8,500

CVS: 7,800

It is hard to imagine a scenario in which Care New England that has merged with Partners has nearly the employment level that is does now.

Cities like "Meds and Eds" (the medical and educational business segments), but Providence and all of Rhode Island is likely to lose high paid, highly educated jobs as a result of this deal.

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Care New England is already healthier

It was announced on Wednesday that the Ontario, California-based Prime Healthcare Foundation has signed a letter of intent to acquire Pawtucket’s Memorial Hospital from Care New England.

Prime Healthcare owns 14 hospitals in the U.S.

Memorial has been a big, but not the only factor, in the demise of Care New England’s financial condition.

"It is certainly no secret that we have had significant financial challenges here (Memorial Hospital),” said Care New England President and CEO Dennis Keefe. "But at the same time it has been clear there is an important obligation to maintain the care and services offered to those in and around Pawtucket. The only way for this to continue is through the partnership we announce today with Prime Healthcare Foundation."

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Can the unions battle?

Within hours of GoLocal breaking the news of the merger, the United Nurses and Allied Professionals (UNAP) President Linda McDonald, RN, released the following statement today:

"This proposed merger has the ability to impact thousands of jobs and the quality of care in Rhode Island and should be thoroughly scrutinized. Like most Rhode Islanders, we only recently learned of this proposal but expect Care New England and Partners HealthCare to be transparent in their process and begin a conversation with our union about the effect any deal would have on our members and our patients.  

Memorial Hospital provides critical care to scores of Blackstone Valley residents every year and preserving its status as a fully-functioning community hospital will be among our top priorities as this process continues to unfold. 
The onus is now on Care New England, Partners HealthCare and Prime Healthcare Services to make the details of this proposal public and to do it quickly so that workers, patients and state regulators may begin asking the appropriate questions."

The nurses represents nearly 1,400 registered nurses, CNAs, ER techs, surgical techs, orderlies, endo techs, environmental employees and ancillary staff at Kent and Memorial hospitals.  But, will they have any impact on the decisions?
 

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Speaking of Lifespan - will they be forced to merge with a Boston partner?

Lifespan is having its financial challenges too. While Care New England lost $53 million last year, Lifespan's losses were $40 million. The Lifespan losses were smaller proportionately to the healthcare group's overall budget and it does not have the cash crunch that Care New England was battling.

In February, Lifespan announced it had has entered into another Boston Hospital agreement. This agreement with Dana-Farber Cancer Institute is a long term agreement with the goal of advancing cancer treatment and research. Lifespan previously entered into an agreement with New England Medical Center and that deal led to years of protracted litigation to unwind. Lifespan also ran into a legal battle with Tufts Medical Center.

Will Partners' potential arrival in the market force Lifespan to affiliate?

 
 

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