Brown Opposes Care New England Sale to Partners, Teaming with Prospect

Friday, January 12, 2018


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Brown President Paxson

Brown University has signed up with Prospect of California to try to purchase Care New England. The duo announced the structure today and came out with a strong attack against the sale of CNE to Partners HealthCare in Boston.

In campus letter, Brown President Christina Paxson asserts that acquisition of Care New England by Boston-based Partners HealthCare is not in the best interests of Rhode Island and certainly would not be in the best interest of Brown and the Medical School. Partners is closely aligned with Harvard Medical School. Partners is a mega- group with an annual budget of $12 billion and employs more than 70,000. 

The letter outlines how the "Brown-Prospect local alternative supports healthcare quality, affordability, and local jobs." Propsect operates Roger Williams Hospital and Fatima and is a for-profit company. Prospect is tied to the collapse of the failed pension system of St. Joseph pension fund.

The Brown and Prospect deal freezes Lifespan out of the acquisition game.

CNE is financially beleaguered -- the healthcare group lost nearly $120 million over the past two years and recently closed Memorial Hospital and cut 800 employees.


Dear Members of the Brown Community,
For years, Brown has worked in partnership with local healthcare systems with the vision of creating an integrated academic health system in and for Rhode Island. We believe that Rhode Islanders should have access to the best medical care in the world without having to leave the state. They should receive high-quality, affordable healthcare — from primary care to specialty care — from Rhode Island physicians who work at the leading edge of medical discovery. And they should benefit from the job creation, business development and economic growth that accompany a thriving local academic health system. 

Rhode Island has all of the necessary ingredients to achieve this vision: outstanding hospitals and a talented healthcare workforce; a distinguished medical school that educates a large portion of the state’s physicians and attracts world-class doctors to the state; a leading school of public health with a strong local focus; and a growing portfolio of externally funded research and industrial partnerships. The last essential element for fulfilling the promise of a strong local academic health system is greater integration and collaboration among the entities involved in healthcare in Rhode Island — our universities, healthcare systems, state and local leaders, and members of our business community and healthcare workforce. 
Although the vision of an integrated academic health system in and for Rhode Island is achievable, it is at risk of not being realized. As you may know, since last April, Boston-based Partners HealthCare has been considering an acquisition of Care New England (CNE), one of Rhode Island’s largest healthcare systems and an important affiliate of Brown’s Warren Alpert Medical School. It is likely that, within the coming months, the State of Rhode Island will face the important decision of whether to permit Partners to acquire CNE. 
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.
Today, the University is announcing an alternative proposal that would keep healthcare in Rhode Island, along with the associated economic benefits. Together with Prospect Medical Holdings, which owns CharterCARE Health Partners in Rhode Island, we are prepared to discuss potential merger discussions with CNE. I am writing to share details of this plan, which we believe is in the best interests of our state, the region and Brown. 

First, here are the key elements of the Brown University-Prospect Medical plan:
• Brown University or a non-profit subsidiary of Brown would acquire CNE’s Women & Infants Hospital of Rhode Island.
• Prospect Medical would acquire CNE’s Kent Hospital and non-hospital assets, such as The Providence Center community mental health organization. 
• Either Brown or Prospect would acquire CNE’s Butler Hospital (with Brown having the right to decide).
• Medical school faculty at Women & Infants, Butler and Kent would either be invited to join a Brown faculty practice plan or to become Brown employees. 
• The majority of any operating margins received by Brown would be reinvested in clinical care, medical research and education.
• Brown and Prospect would offer CNE a Letter of Intent and enter into a period of expedited due diligence at CNE’s earliest convenience. 

Brown believes that this plan, which would place one or two key academic hospitals under Brown’s care, positions us to create the healthcare system that Rhode Island deserves. Over the long run, we envision Women & Infants Hospital and Butler Hospital — two of the state’s premier specialty hospitals — serving as resources for all healthcare systems in the state. We also envision them as vital pieces of an integrated academic health system that includes Lifespan, Brown’s valued partner in medical education and research. This integrated system would deepen collaboration with other Rhode Island health care providers, insurers and public officials to deliver affordable, high-quality healthcare. 

A critical moment for this new model
After CNE announced last April that it would enter merger discussions with Partners, and in light of our growing concern about the adverse consequences for Rhode Island of a Massachusetts-based acquisition of CNE, Brown began exploring alternatives that would keep healthcare in Rhode Island. We are pleased that Prospect has proved to be a willing partner in developing a plan. 
Prospect has a national reputation for operating quality, cost-efficient healthcare facilities. Its approach is to tailor offerings to local patient populations with strong local leadership. Prospect also has made strong investments in its facilities, technology and people in Rhode Island, reflecting its deep continued commitment to Rhode Island and its healthcare system. 
The plan Brown has developed with Prospect reflects Prospect’s desire to create a robust network of community hospitals in Rhode Island, along with Brown’s desire to work toward an integrated academic medical center. Our intention is to submit the Brown-Prospect plan to CNE for consideration if the Partners acquisition does not go forward, either because Partners withdraws, or its application to the state is denied. 

Brown has a strong stake in CNE’s success. As one of the state’s largest employers, Brown cares deeply about Rhode Islanders having access to high-quality, affordable healthcare. In addition to being an important provider of healthcare in the state, CNE is home to Brown’s programs in obstetrics and gynecology and neonatology (at Women & Infants); in psychiatry (at Butler); and in family medicine (which CNE is relocating from Memorial Hospital to Kent). Currently, about 30 percent of Brown’s medical education takes place in CNE facilities, and Brown’s CNE-affiliated medical faculty are distinguished educators and researchers. 

Obviously, there are many uncertainties at this point. The state may permit a CNE-Partners merger to take place. If it does, we are committed to working with Partners to maintain the productive relationship that Brown has enjoyed with CNE. We believe that a strong relationship with Partners would be essential to maintaining strong clinical care, medical education and research in Rhode Island. And, if the Partners acquisition of CNE does not proceed, the CNE board of directors will have to decide if our approach is right for CNE. Because CNE is currently in an exclusive arrangement with Partners, we have not been able to discuss the Brown-Prospect plan with its leaders. We value our long-standing partnership with CNE and have great respect for the CNE leadership. We will welcome their continued involvement if we are given the opportunity to move forward with a local alternative.  

Despite the uncertainties, we feel it is important to let the community know that Brown is prepared do all it can to keep high-quality and affordable healthcare available to Rhode Islanders. We are determined to build an academic health system that is an engine of economic growth for our city and state, and we are fully committed to bringing together community members and stakeholders to work together in the best interests of healthcare in Rhode Island.

Christina Paxson


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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