Boston’s Partners HealthCare Moves Forward to Absorb Care New England, Faces Opposition in RI

Friday, January 26, 2018


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Partners' annual budget is nearly 50% larger than RI's

Despite facing strong opposition from Brown University, U.S. Senator Sheldon Whitehouse and others, Partners HealthCare in Boston is moving forward after ten months to absorb RI-based and financially struggling Care New England. The Boston giant employs over 70,000 and has a budget of $13.5 billion -- almost 50 percent larger than the state of Rhode Island's.

As GoLocal first reported last April, CNE and Partners announced that they signed a Letter of Intent (LOI) and agreeing to negotiate exclusively.  

Latest Development

Today’s announcement of moving forward with the deal was approved by the Boards of Directors of Care New England and Partners HealthCare this week at two separate board meetings.  Both CNE and Partners hope to develop and execute the definitive agreement as soon as possible according to the companies.

As a result of today’s announcement, the existing letter of intent (LOI) and exclusivity has been extended until such a time as a definitive agreement has been executed.

Fiscal mismanagement has caused chaos on the CNE. Hundreds lost their jobs when Memorial was closed earlier this month. Moody's downgraded their bond-rating and the hospital group lost over $120 million in the past two-plus years.

Brown University Strongly Opposes Deal

In an unusual move, Brown University's President Chistina Paxson recently blasted the Partners move into RI.

"I feel strongly that letting this acquisition go forward would be wrong for Rhode Island and for Brown. Doing so is likely to lead to specialty healthcare shifting to Massachusetts, impeding access to healthcare for Rhode Islanders and especially for members of the state’s underserved communities. It also would likely increase the cost of care and reduce the ability of Rhode Islanders — consumers, businesses, healthcare workers and policy-makers — to have a voice in how our healthcare system works. If the focal point of Rhode Island healthcare shifts to Boston, excellent physicians (many of them Brown-trained) could be less likely to choose Rhode Island as a place to practice. In addition, the full economic benefits of a strong local academic health system — one that brings in federal grants, generates spin-off companies and creates new jobs in Rhode Island— would be lost, perhaps forever," said Paxson in a letter to the Brown Community.

Brown and Prospect -- the owners of RI-based Care New England teamed together to try and keep CNE RI-based.

Announcement Details

The plan to move forward with a definitive agreement announced today includes Kent Hospital in Warwick; Women & Infants Hospital of Rhode Island in Providence; the VNA of Care New England, based in Warwick; Butler Hospital in Providence; and The Providence Center in several Rhode Island locations. Under the proposal, the strong educational and research relationship that CNE has fostered with Brown University will continue to play a critical role in the healthcare landscape and its future development.

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Paxson strongly opposes the Partners' deal

“Today’s announcement is a positive step for Rhode Island health care as well as our state’s economy,” said CNE Board Chair Charles R. Reppucci. “I would like to express my most sincere appreciation to all involved who helped us get to this important milestone. While we still have much more work ahead of us, we are one step closer to realizing a unique clinical affiliation that would place Rhode Island at the forefront of health care delivery both locally and beyond.”

Said CNE President and CEO James E. Fanale, MD, “We look forward to the opportunity this now affords and what it means for the delivery of high-quality health care for our patients, the community we serve, and our vital academic partnerships. We will continue to focus our efforts on the remaining work while doing so with perseverance that reflects the needs of our patients and the ever-changing healthcare landscape.”

“Since 2009, CNE and the Brigham have had a close clinical affiliation. By combining the talent, experience, and resources of our two organizations, we will achieve more integrated, coordinated care offered conveniently – in the right place at the right time – improving outcomes and reducing the rise in health care costs,” said Brigham Health President Betsy Nabel, MD. “Partners and Brigham Health are steadfast in our commitment to strengthen local care delivery and enhance quality for patients and communities that Care New England serves.”

“Our lengthy discussions and due diligence with CNE have strengthened our relationship and further solidified our interest in building on the successful clinical collaboration we have already developed together,” said Partners HealthCare President and CEO David Torchiana, MD. “We are also aware of and deeply respectful of the other components of the Rhode Island health care landscape and hope to find common ground and mutually beneficial pathways to improve the academic strength of the hospital programs and maximize the benefit to the Rhode Island economy.”


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 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 ranked for research way back at #31.

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

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 Continues to Struggle

Despite hopes that closing Memorial Hospital would solve the financially beleaguered Care New England's economic woes, new financial documents unveil that CNE continues to struggle.

Additionally, the pursuer - Partners HealthCare - is also making cuts. The Boston Globe unveiled the Partners is cutting about 100 of the company’s tech workers that their jobs were being outsourced to India to cut costs.

“Many of the employees have worked for Partners for several years, or even decades, and are struggling with the company’s decision. Almost all are coders — people who scour patients’ medical records to pinpoint billable services — and earn upward of $40 an hour. Coders in India earn a fraction of that amount, making overseas coding an attractive way for hospitals to cut costs,” wrote the Boston Globe.

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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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