Last Update: March 21 @ 11:04 PM
Health care
Lifespan-Care New England merger is on slow track
By Marion Davis
Contributing Writer


The proposed merger between Lifespan and Care New England, which a top executive last July predicted could go through within nine months, is taking a much slower course than anticipated, with no formal application for state approval even filed yet.

Under the R.I. Hospital Conversions Act, a 1997 law that provides for close government scrutiny of any proposed change in ownership of a licensed hospital, such changes are subject to the approval of both the R.I. Department of Health and the attorney general’s office.

Both agencies review the application simultaneously, with a strict time frame: First, they have 30 days to determine whether an application is complete and acceptable for review. Then the applicant has 30 days to correct any deficiencies. Then the two agencies have 180 days to review the application, hold public hearings and make a decision.

That means if the Lifespan-Care New England request were filed this week, it might not get through the process until mid-November – more than 15 months after the two health systems’ CEOs first announced their intentions.

But Jane Bruno, a spokeswoman for Lifespan, said last week that the application is likelier to be filed in late April or even May.

Yet while a previous plan to merge the two entities in 1999 fell apart after long delays and considerable public opposition, Bruno stressed that this plan is still going strong: “We’re as committed and as excited about the merger as we were when we announced it in July.”

Lifespan, which includes Rhode Island Hospital, Hasbro Children’s Hospital, The Miriam Hospital, Newport Hospital and Bradley Hospital, is already the state’s largest private-sector employer, with more than 11,000 workers and $1.3 billion in revenue.

Care New England, which includes Women & Infants Hospital, Kent Hospital and Butler Hospital, is more than half Lifespan’s size, with about 6,700 employees and $610 million in revenue.

If the merger went through, the new company, to be known as Lifespan, would control about 70 percent of the Rhode Island hospital market – a daunting proposition for many, including Gov. Donald L. Carcieri and Attorney General Patrick C. Lynch, both of whom have promised a careful review of the plan to ensure it serves the public good.

Because of the scope of the plan, which includes a partnership with Brown University to transform the Rhode Island Hospital campus into a full-fledged academic medical center, as well as plans to move Butler Hospital and to turn Kent Hospital into a trauma center, state officials chose to make the approval process more formal and public than ever before.

But first the application must be filed, and Bruno noted that it’s all the more challenging because officials are treating this not as one conversion, or even as three – the Care New England hospitals – but as the conversion of every single entity involved.

And the plan could get more complicated: The financially troubled Landmark Medical Center, which had made overtures to Lifespan last summer but then backed off in September, recently contacted Lifespan officials again, Bruno said, “and we have talked with them.”

Meanwhile, efforts continue to rally support for the merger. The systems’ CEOs have addressed numerous business and community groups, touting their plan as a major economic development opportunity for the state, and they recently posted a video, available at Lifespan.org, in which patients, doctors and researchers tout the benefits of the merger.

But there’s another side as well. Insurers, for example, have been looking at how the plan could affect them, though none has a formal position yet. And the unions that represent Lifespan and Care New England employees are also scrutinizing the plan.

Rick Brooks, executive director of the United Nurses and Health Professionals, said his union has met with Lynch and Dr. David R. Gifford, the state health director, “to express some concerns” about the merger.

The union wants “some effective checks and balances” to ensure the new entity acts in the public interest, such as creating a quasi-public “hospital review authority” that could review the system’s finances, gauge how it’s serving the community, look at its impact on the overall health care system, and make information available to the public.

“While there are already some regulatory requirements in place, we think that for a system that would own 70 percent of the hospital business, there needs to be a greater level of accountability than currently exists in the law,” Brooks said.

UNAP isn’t opposing the merger, Brooks said, but union members have expressed “a fair amount of discomfort” with it.

“Their perception is that Lifespan might be too big and powerful, and from our perspective as the union, that means we need to make sure our members are protected,” Brooks said. •

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