Mega-Merger: Lifespan and CNE Sign Agreement - Brown to Invest $125M, Will Need Federal Approval
Tuesday, February 23, 2021
Care New England and Lifespan have announced that they have signed a merger agreement.
It would combine Lifespan’s Rhode Island, Miriam, Hasbro, Newport and Bradley Hospitals, and Care New England’s Women & Infants, Kent, and Butler Hospitals — with Brown’s leading research and medical education from The Warren Alpert Medical School.
This will create according to the companies "an integrated academic health system (AHS) that has the full array of complementary medical specialties required for excellence in health care, biomedical research to remain on the leading edge of treatment and therapies, and the collaboration required to enable medical practitioners to effectively and efficiently provide health care to the community."
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTAs part of the agreement Brown University has committed to provide a minimum of $125 million over five years in support of the development of the integrated AHS with Lifespan and Care New England.
Brown will participate on the governing board of the newly merged health system and play a key role in integrating medical education and research with clinical practice across the combined system’s hospitals.
In addition, as GoLocal reported in December, financially troubled Care New England unveiled in financial documents that it has a growing unfunded pension obligation.
The pension liability including this year’s yet to be made estimated $30 million payment will drive the total unfunded gap to more than $160 million.
“It is gratifying to finally realize the vision of an integrated academic health system with Lifespan, Care New England and Brown University. Together, we are better able to serve as an economic engine for the state. The health sector in any region is a source of good paying jobs, not only within the hospital systems, but the businesses created and driven by goods and services that hospitals purchase. We want to be sure that these remain strong for many decades to come,” said Lawrence A. Aubin, Sr., Lifespan Board of Directors Chairman.
“Unique to this business merger, is the intense involvement of Brown as a higher education institution committed to education and research. “Brown is excited to invest $125 million over five years to bring together the medical expertise and capacity needed to create exactly the kind of integrated academic health system that has provided such dramatic success in healthcare, medical education and biomedical innovation for other regions across the country,” said Samuel Mencoff, Chancellor of the Corporation of Brown University.
Mergers Don't Mean Better Healthcare or Lower Costs
The hospitals claim that there are benefits to Rhode Islanders, but research shows that there is rarely improvement to healthcare or decreased costs in similar mergers across the country.
Research published in the New England Journal of Medicine in February, 2020, conducted by Harvard University researchers looked at hospital performance between 2007 and 2016, a period punctuated by several hospital mergers. They studied 246 hospitals that had been acquired and 1,986 control hospitals, looking at their performance in four categories: clinical process, patient experience, mortality and rate of readmission after discharge.
“The hospital industry has consolidated substantially during the past two decades and at an accelerated pace since 2010,” the study stated. “Multiple studies have shown that hospital mergers have led to higher prices for commercially insured patients, but research about effects on quality of care is limited.”
This study comes on the heels of a 2019 report in The New York Times, "Hospital Mergers Improve Health? Evidence Shows the Opposite" that found that cost increase and quality decreased when hospital groups merge.
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