Lifespan and Care New England, the state’s two large health care systems, announced today that they plan to merge into a single entity, to be known as Lifespan.
Together, as Gov. Donald L. Carcieri pointed out in a news release, the companies would control nearly three-quarters of Rhode Island’s hospital system, including Rhode Island Hospital, The Miriam Hospital, Women & Infants Hospital, Kent Hospital, Newport Hospital, Bradley Hospital and Butler Hospital, as well as two visiting nurse services.
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In addition, Lifespan President and CEO George Vecchione acknowledged at a press conference, the two partners are talking with Landmark Medical Center about a possible deal, though he wouldn’t provide details.
And Brown University’s Warren Alpert Medical School, which has research and teaching ties to both hospital systems, is a key player in the planned merger. The school is planning to relocate near the Rhode Island Hospital, and that move, the companies said in a news release, will create the state’s “first comprehensive academic medical center.”
“Bringing together Lifespan and Care New England provides us with a unique opportunity to create a comprehensive and high-quality health care system that will be of great value to our patients, our employees and the community,” said Alfred Verrecchia, chairman of the Lifespan board. “The merger will allow us to provide high levels of care in the most cost-effective way.”
Asked how quickly he expects the needed regulatory process to move forward, Vecchione a six- to nine-month time frame “would be viewed as very efficient,” and he wouldn’t expect it to take much longer than that.
This is not the first time that Lifespan and Care New England have talked about merging. In 1998, the two applied for the regulatory approvals needed to merge, but in 2000, they withdrew their applications.
Vecchione said many of the factors that made a merger appealing in 1998 still exist today, and both companies are in a better position to pull it off, with stronger finances and better relationships with employee unions, among other improvements.
This merger plan is also stronger, he noted. While the last application “lacked a lot of specificity, so there was a concern that there was a hidden plan,” Vecchione said, this plan is very detailed, so it should allay any worries about how it will play out.
“This is a very different time and a different application,” he said.
Leaders of both hospital systems also stressed that while they expect to achieve some “efficiencies,” especially in their central-office operations and through a better alignment of services across the system, they don’t expect substantial job cuts.
“This transaction is not about cost-cutting. It’s not about layoffs,” said Vecchione, noting that the turnover within both systems is substantial enough that attrition should cover any cuts.
What the planned merger is about, Vecchione and others said, is about future growth, system improvements and a stronger connection with Brown Medical School.
“Closer links among pediatricians and OB/GYNs, emergency departments, pediatric and adult psychiatry, to name just a few, will bring a new level of care to Rhode Island,” said John J. Hynes, Esq., president and CEO of Care New England.
“Additionally,” Hynes continued, “integrated user-friendly computer systems will allow physicians to have access to patient records in their offices, resulting in minimal duplication of tests, faster admissions for patients, and quicker access to lab tests – all allowing treatment to be delivered in a more seamless fashion.”
There are some substantial changes built into the plan:
* Butler Hospital’s East Side campus would be sold “or otherwise developed” to finance construction of a new hospital facility near Rhode Island Hospital, and a Brain Sciences Institute would be established within Butler.
* Kent Hospital would become a Level II trauma center and would seek to create an emergency medicine residency program. Right now, trauma victims are either treated at community hospitals, or they go to Rhode Island Hospital, the state’s only Level I trauma center. Upgrading Kent’s capabilities, the two companies said, “will enhance statewide disaster responsiveness.”
* The VNA of Care New England would be folded into Lifespan’s VNA.
But it all still has to be approved, and while there was no immediate indication today that anyone intends to outright fight against the plan, the response was definitely mixed.
Carcieri noted that if it goes forward, the merger “will have a major impact on Rhode Island’s health care delivery system,” and the creation “of such a dominant health care network” would raise “a number of important concerns.”
Still, Carcieri added, “done correctly, this merger could actually help drive health care reform in Rhode Island. In particular, we expect this merger will create opportunities to improve health care quality, reduce health care costs, make the use of health information technology more widespread and effective, and bolster Rhode Island’s primary care system.”
His administration, he said, will use its powers under the Hospital Conversion Act “to ensure that this merger will achieve these goals.”
Lt. Gov. Elizabeth H. Roberts issued a statement saying that during the merger review process, “I will advocate for a focus on the core mission of hospitals to serve the public and recognize the importance of this proposal’s potential for economic growth in the state.”
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