RI’s Hospitals - State’s Largest Employers - Are Being Consumed By Out-of-State Interests
Monday, April 24, 2017
Rhode Island’s largest private sector employers are healthcare organizations - and they are being devoured by out-of-state interests in record speed. The implications are profound.
In the past week, three major “deals” were announced. First, financially troubled Care New England (CNE), Rhode Island’s second largest employer, announced that it signed a letter of intent to explore a merger with Massachusetts-based Partners HealthCare. CNE owns and operates Kent Hospital, Women & Infants, and Butler Hospital.
Second, Care New England announced the sale of Memorial Hospital to Ontario, California-based Prime Healthcare Foundation.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThird, South County Hospital announced that is beginning negotiations to affiliate with Yale New Haven Healthcare System.
SEE SLIDESHOW BELOW: RI HOSPITALS - How Big and How Much Revenue
The developments are the latest in a number of healthcare shakeups in the state in recent years.
In 2013, Prospect Medical Holdings acquired CharterCare — the umbrella group to Roger Williams hospital and Our Lady of Fatima hospital.
That same year, the RI Health Care Planning and Accountability Advisory Council reported that Rhode Island had 200 more hospital beds than needed. “Rhode Island will probably need fewer inpatient beds in the future – most likely comprising the equivalent of an entire hospital. The amount could be even greater with a set of policies promoting more organized primary care,” said the report.
The deal that would have the biggest implication is the CNE and Partners deal. The implications could be significant for Rhode Island.
“One of my top priorities is making sure every Rhode Islander has access to quality, affordable care – we can’t build a healthy economy without healthy families. I look forward to learning more about this proposal as it moves forward, to ensure that it continues to provide quality health care and does not result in significant job losses for Rhode Islanders,” said Governor Gina Raimondo in an email to GoLocal.
“The merger of CNE with Partners HealthCare will have a major impact on Rhode Island's health care and economic landscape,” said Gary Sasse who heads the Hassenfeld Institute for Public Service.
“It is never easy for an out of state business to take control of vulnerable local institutions with the resulting separation of ownership from management. However, we have witnessed this in banking and numerous other industries. Healthcare is not exempt from this economic reality," added Sasse.
How Important is Healthcare to RI’s Economy?
Healthcare groups is Rhode Island are the first, second and ninth largest private employers.
Lifespan employs 12,050, CNE employs 8,500, and Charter Care 3,002.
Sasse says there are six critical issues to review in considering the proposed merger:
1) CNE is financially problematic and a merger with Partners brings immediate fiscal stability.
2) Partners operates world class hospitals which can be used to leverage access to specialized services.
3) The merger may open the door to ways to reduce health care costs without sacrificing quality.
4) Rhode Island does not have a 'stand alone economy' - its economic future is inextricably linked to the region. The merger could make Rhode Island more of a player as regional healthcare strategies are developed and implemented, as they inevitably will be.
5) The option of Prime Healthcare buying Pawtucket Memorial beats the alternative of closing this money hemorrhaging facility.
6) The alternative of Lifespan taking over CNE raises anti-trust and monopoly concerns.
Robert Whitcomb, former Editor of the Editorial Page of the Providence Journal and now a GoLocalProv columnist wrote this weekend, "Massachusetts regulators don’t want to let Partners (which owns, among other prestigious institutions, Massachusetts General and Brigham and Women’s hospitals) to get even more pricing power in Greater Boston than it has long had. So, Partners officials have decided to expand into the relatively close, and densely populated, Rhode Island area, as it already has into southern New Hampshire. Lots of customers."
EDITOR'S NOTE: Gary Sasse will be on Business Monday on GoLocal LIVE at 4:00 PM on April 24 to discuss the changes in healthcare.
Related Slideshow: RI Hospitals: How Big and How Much Revenue
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