PROVIDENCE – It’s official: The merger between Roger Williams Medical Center and St. Joseph Health Services of Rhode Island has been approved, with the final piece – Attorney General Patrick C. Lynch’s consent – announced Wednesday, three months after health officials gave their OK.
Under the deal, both hospitals will come together within a new corporate entity, CharterCARE Health Partners. Integrated operations are slated to begin in January, said Kenneth Belcher, president and CEO of both Roger Williams and CharterCARE.
This is the first merger ever to be completed under the Hospital Conversions Act, a state law passed in 1997 – amid a wave of proposed hospital mergers – that significantly tightened the rules and imposed a rigorous approval process.
It took the two hospitals nearly 18 months to get approval after announcing their merger plan – 10 months to prepare the application and eight to win approval. Lifespan and Care New England, which unveiled a merger proposal in July 2007, are still going through their own approval process.
In a statement, Belcher said Roger Williams and St. Joseph were “pleased” to be the first to successfully merge under this law, and added: “We now begin a carefully planned process of system collaboration, integration and consolidation as we act to fulfill the promise and potential of our affiliation that has guided us throughout the regulatory review process.”
Both hospitals had good reasons to believe their application would be approved. There was minimal public comment and no opposition at hearings on the proposal. Dr. David R. Gifford, director of the R.I. Department of Health, gave his approval in July.
Lynch, whose role was to review compliance with the Hospital Conversions Act and also common law regarding the ownership of charitable assets, took more time but never suggested that an approval would not be forthcoming.
In a statement, Lynch said the deal had been subjected to a “rigorous review,” and “as a result, I am hopeful that these two important charitable institutions, which truly are cornerstones in our community, will continue to provide vital health care services to Rhode Islanders for generations to come.”
Lynch added that his review had been guided by two factors: maintaining the same access to health care that the hospitals provided separately, and preserving jobs.
“In the hyper-competitive and rapidly changing health-care marketplace,” he said, “it was and is essential that the smaller community hospitals remain strong and well positioned to succeed.”
Gifford’s own approval was based on the hospitals’ acceptance of 22 conditions, including a pre-merger melding of the two organizations’ corporate compliance and ethics policies; a plan to standardize all clinical policies and procedures within three years; and a searchable Web site with the prices of services for people paying out of pocket.
Gifford also required the hospitals to commit to file regular financial reports, including one due within 90 days of affiliation that lays out how the hospitals plan to attain the $15 million in savings they touted as one of the benefits the merger would bring.
In the months since Gifford’s approval, the hospitals had continued to prepare for the merger, and Belcher on Wednesday unveiled the names of the 15 people who will serve on the CharterCARE board of trustees, including the chairman, Edwin Santos, who also chairs the Roger Williams board. Roger Williams contributed seven members, and St. Joseph, eight.
The two hospitals serve similar geographic areas and populations to some extent, but they are very different.
Roger Williams Medical Center, an independent hospital, has nearly 1,400 employees and is an affiliate of the Boston University School of Medicine; it also runs Elmhurst Extended Care, a nursing home.
St. Joseph is associated with but not financed by the Roman Catholic Diocese of Providence. It includes the St. Joseph Hospital for Specialty Care, Our Lady of Fatima Hospital, the St. Joseph Living Center, the St. Joseph School of Nursing and the Southern New England Rehabilitation Center.
The new entity, CharterCARE, will control 579 licensed hospital beds and have estimated annual operating revenue of about $330 million. It is expected to employ about 3,200 people. Although CharterCARE is not a religious entity, it has been designed to protect the Roman Catholic nature of St. Joseph.
Additional information is available at www.chartercare.org.
