Partners, Care NE sign definitive merger deal

PROVIDENCE — In a development that could remove some of the uncertainty surrounding the future of health care in Rhode Island, Care New England Health System and Boston-based Partners HealthCare have signed a definitive agreement that makes formal the Boston group's plan to acquire CNE.

The signing, announced in a joint media release Wednesday, was accompanied by upbeat declarations from leaders of the two systems — and from Brown University president Christina Paxson, a critical player on the health care landscape in her role as head of the university that includes the Warren Alpert Medical School.

Federal and state regulars in Rhode Island and Massachusetts will have to approve the transaction, a process expected to take several months after the systems formally file for approval, expected to be in late summer or early fall.

“Today marks an important milestone for Rhode Island health care,” said CNE president and CEO Dr. James E. Fanale. “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.”

“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 health care innovation in Rhode Island,” said Dr. David F. Torchiana, Partners president and CEO.

Founded by Brigham and Women’s Hospital and Massachusetts General Hospital, the nonprofit Partners includes several other hospitals, community health centers and other services. It is a teaching and research affiliate of Harvard Medical School.

Also nonprofit, Care New England includes Butler, Kent and Women & Infants Hospitals, The Providence Center, VNA of Care New England and other entities. Care New England is a research and teaching affiliate of Brown’s medical school.

“Partners has enjoyed a decade-long relationship with Care New England that’s brought specialized Brigham Health services to patients right here in Rhode Island,” said Brigham Health President Dr. Elizabeth Nabel. “Our agreement today will solidify our collaboration, deepen that commitment to quality local care, and will also mean new investments in Brown University-led research, with the important goal of continuing to strengthen the relationship with The Warren Alpert Medical School.”

That appears to allay the concerns of some that Care New England's acquisition by the larger Partners would threaten Brown’s position, with medical-school faculty tempted to shift allegiances to Harvard Medical. A statement by Paxson appeared to be a retreat from her earlier opposition to the acquisition — and a suggestion that Brown consider teaming with for-profit, California-based Prospect Medical Holdings to buy Care New England.

“Preserving and strengthening health care and biomedical research and innovation in Rhode Island continues to be an important priority,” Paxson said. “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.

“Brown has a long and productive partnership with Care New England, and the continued success of Care New England is important to the university and to the people of Rhode Island. Brown will continue to support collaboration among organizations dedicated to serving the health needs of Rhode Islanders and economic development in the state.”

But a spokesman for CharterCare, the joint venture with Prospect Medical Holdings that runs Roger Williams Medical Center and Our Lady of Fatima Hospital, among other entities, was stinging in his criticism of Wednesday’s announcement.

“A Partners acquisition of Care New England will be devastating for Rhode Island health care 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,” spokesman Bill Fischer said.

“The mere contemplation of this merger has already cost Rhode Islanders hundreds of jobs with the closure of Memorial Hospital [in Pawtucket], and left thousands of residents in the Blackstone Valley with inadequate access to emergency room care.”

Meanwhile, Lifespan, Rhode Island's third major health system, provided a measured response.

“Lifespan remains in discussions with Partners HealthCare and Care New England as we explore options for building upon our world-class health system," Jane Bruno, Lifespan's senior vice president of marketing and communications, said. "Partners and Care New England’s announcement was not surprising, as the two organizations have been in negotiations for more than a year. Lifespan, Partners’ and CNE talks — started in February — remain productive as both organizations thoughtfully consider their futures in an ever-changing health care environment.”

United Nurses and Allied Professionals President Linda McDonald praised Paxson’s reaction and urged diligence in the regulatory reviews.

“We were pleased to see Brown University president Christina Paxson walk back the school's previous commitment to pursuing a partnership with Prospect/CharterCare … 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,” McDonald said.

“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 health care system.”

Financial details of the definitive agreement have not been disclosed.