Boston’s Partners HealthCare Furthers Discussion With Lifespan - More Loss of Local Control?
Monday, August 20, 2018
Business Business Journal.
Partners' Chief Financial Officer Peter Markell told BBJ that the discussions with both Harvard Pilgrim — the Massachusetts health insurance giant and Lifespan are ongoing. GoLocal has previously reported both extensively on Partners’ acquisition strategy.
The implications to Rhode Island of the Partners entrance into the Providence market will have a significant, or some might say, devastating impact on the Rhode Island healthcare industry.
“I think it will take longer than most people thought, but we are still having discussions,” Markell told BBJ. “They are the normal things in a deal. This one is really complicated. We’re really trying to create a new view of how we would bring care to the community, financing and everything else. There are structural, governance, execution (issues) that just take time to work out and discuss.”
Regarding Partners’ discussions with Lifespan, Markell said there was a “range of things being discussed.”
Lifespan is by far the largest private employer in Rhode Island. According to Lifespan’s data the company employs 14,882 — about twice the size of CVS’ employee count in Rhode Island.
But Lifespan’s size is dwarfed by Partners. The Boston-based conglomerate reports more than 70,000 employees — before their now pending acquisition of Care New England or their merger with health insurer Harvard Pilgrim already exceeds 70,000.
According to a recent piece in the Boston Globe on the compensation structures for non-profit CEOs — Partners’ chief executive, Dr. David Torchiana, topped the list as he earned nearly $4.3 million in total compensation, according to 2015 tax data — the most recent that is publicly available.
Partners and Care New England have requested an expedited review of their yet un-submitted application under the RI Hospital Conversation Act (HCA). Concerns are mounting that the acquisition of many of Rhode Island’s most important healthcare institutions by the Boston concern will be jammed through with under the expedited review. Care New England owns Women and Infants, Kent, and Butler hospitals to name a few of their assets.
The company closed Memorial Hospital in Pawtucket at the New Year, slashing 800 jobs. In total, Care New England has cut thousands of jobs over the past two years plus years. Care New England has lost approximately $110 million in the past three years.
The last major HCA review in 2014, was the Prospect acquisition of CharterCare. That deal was approved by both RI Health and Attorney General Peter Kilmartin and was green-lighted, but by August 2017, the pension fund which had been deemed solvent and fully funded by Kilmartin’s office was thrust into a receivership.
Republican front-runner for governor Allan Fung is raising questions about the expedited review request and the potential implications to healthcare costs for Rhode Islanders.
"A study commissioned by the Rhode Island Office of the Health Insurance Commissioner demonstrated that this merger would likely raise commercial health insurance premiums here in the state,” said Cranston Mayor Fung.
“At a time when families are stretched while trying to make ends meet, a thorough review of every detail and its impact on Rhode Island families needs to be made. This is the largest healthcare merger in Rhode Island, and Partners should not expect special treatment - even if they did throw the Governor a fundraiser,” Fung added.
A Partners takeover of Care New England is likely to impact more healthcare jobs in Rhode Island as backend supports — functions such as human resources, purchasing, etc., are usually consolidated in such acquisitions.
Partners' deals with insurer Harvard Pilgrim and Lifespan are on longer-term timelines.
This story was first published 8/19/18 2:30 AM
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