Partners & Care New England Sign Definitive Agreement, Brown Begins Negotiations, Lifespan Out?

Thursday, May 24, 2018


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Christina Paxson

The game of Rhode Island healthcare musical chairs entered a new round. Partners HealthCare in Boston and Care New England have taken the next step. The economically fledgling Care New England which has lost more than $120 million and closed Memorial Hospital looks to be losing its local control. 

Now, Brown University, which had issued multiple statements lamenting the entrance of Partners into the Rhode Island market, is changing its tune. Lifespan, who had said it was part of the Partners HealthCare deal with Care New England, is now an unknown in today's shuffle. CharterCare has told GoLocal that they will continue to move forward to keep control in Rhode Island. 

“Preserving and strengthening healthcare and biomedical research and innovation in Rhode Island continues to be an important priority. As Brown’s discussions with Partners and Care New England continue, I am optimistic that we can address the various concerns that I raised earlier this year,” said Brown's President Christine Paxson in a statement.

The statement was a big switch from her January's comments saying the deal was bad for Brown and bad for Rhode Island. As Paxson said earlier:

"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."

All of the gamesmanship comes as Partners and Care New England announced on Wednesday that they have signed a definitive agreement.

Definitive Agreement Signed

The definitive agreement signed formalizes Partners’ planned purchase of Care New England. What a definitive agreement is no one knows -- none of the terms of the deal were released. Partners has refused to disclose any of the financial elements of the deal.

“Today marks an important milestone for Rhode Island health care. Care New England has made significant progress in the last year to strengthen our financial outlook, and now while we will work through this important regulatory process, I am confident our affiliation with Partners will help us further invest in quality local care for the community, building upon the tremendous successes already in place,” said Care New England President and CEO James E. Fanale.

David Torchiana, President and CEO, Partners HealthCare added, “We believe that this partnership will further strengthen an already robust local health care system and provide opportunities for new investments in patient care, research, and healthcare innovation in Rhode Island.”

According to the joint press release from Care New England and Partners, the goals of the merger include building on clinical relationships between the parties, ensuring ongoing clinical research and educational collaboration in support of the parties’ charitable missions, enabling the organizations to more efficiently use their resources, and establishing effective and expanded approaches to population health management.

With the signing of the definitive agreement, Partners and CNE will continue discussions with Lifespan.

Partners and CNE invited Lifespan to the affiliation conversations earlier this year because the parties share a mutual desire to improve access, quality, and efficiency of care for all Rhode Islanders.

CharterCARE and UNAP Issue Statements 

Following the signing of the definitive agreement, both CharterCARE and UNAP issued statements. 

“A Partners acquisition of Care New England will be devastating for Rhode Island healthcare consumers, employers, and insurance providers. Rhode Island regulators have already rung the alarm bell that Partners will use their market leverage to increase reimbursement rates if this merger moves forward. The mere contemplation of this merger has already cost Rhode Islanders hundreds of jobs with the closure of Memorial hospital, and left thousands of residents in the Blackstone Valley with inadequate access to emergency room care," said Bill Fischer, spokesperson for CharterCARE.

Fischer added, “It has been more than a year since Partners and CNE announced their intent to merge and yet again today no details have been provided to the general public explaining how any of this will work.”

UNAP President Linda McDonald released the following statement: 

"As with all potential mergers, we are eager to learn more about the details surrounding a formal arrangement between Care New England and Partners HealthCare. 

We encourage state regulators to be diligent in their review and at the appropriate time, our union looks forward to participating in thoughtful and productive exchanges with management on preserving local jobs and health services; improving working conditions for bedside caregivers and support professionals, and investing capital in Rhode Island's healthcare system.

Additionally, we were pleased to see Brown University President Christina Paxson walk back the school's previous commitment to pursuing a partnership with Prospect / CharterCare. Prospect has a well-documented record of putting patient safety at risk and we believe it is in the best interest of all Rhode Island patients and health workers to focus on the potential of a Care New England and Partners HealthCare relationship."


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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