News, University News

Talks to create statewide health system dissolve

Partners ends plan to merge with Care New England, CNE ends talks with Lifespan

Senior Staff Writer
Friday, September 6, 2019

Care New England healthcare system chose to pull out of tri-party talks to build a unified health system in Rhode Island with Lifespan and the University’s medical school. President Christina Paxson P’19 called the conclusion disappointing but sees CNE and Lifespan as valuable partners.

Negotiations to create a unified academic health system for Rhode Island, which included the Alpert Medical School, fell apart July 16 after the Care New England health system withdrew from talks and decided not to merge with its larger competitor.

CNE’s decision not to merge with Lifespan, another Rhode Island health system, came about a month and a half after R.I. Gov. Gina Raimondo first asked CNE, Lifespan and the University to discuss a three-party relationship to build an academic health system for the state.

Partners HealthCare, which previously had plans to acquire CNE, withdrew its merger application in an effort to accommodate Raimondo’s request, according to its CEO, Anne Klibanski.

Disappointment and Confusion

President Christina Paxson P’19 expressed disappointment at the talks’ dissolution. “We continue to believe that merging Lifespan and Care New England, in close partnership with Brown, would deliver … greater access to high-quality affordable health care and job growth that stems from a thriving biomedical research sector,” Paxson wrote in a July 16 statement. The Med School has strong academic and research affiliations with several hospitals in both systems.

Lifespan is also “extremely disappointed that CNE chose to abruptly end talks,” Lifespan CEO Timothy Babineau wrote in an email to The Herald. The creation of a unified, locally-controlled health system would have benefited both systems’ patients and communities as well as the University, Babineau wrote.

“Lifespan remains perplexed as to why CNE chose to abandon this compelling and exciting vision,” he added.

CNE’s board of directors considered multiple factors when deciding to withdraw, including “the financial stability of the combined system, community need (and) anti-trust considerations,” Charles R. Reppucci, chair of CNE’s board of directors, and James Fanale, president and CEO of CNE, stated in their announcement.

Still, Fanale and Reppucci “look forward to expanding (their) collaboration with Lifespan and Brown University on new clinical and academic opportunities,” according to the press release.

Paxson maintains that despite the “disappointing conclusion” to the talks, CNE and Lifespan will both remain “valued partners” to the Med School.

Dean of Medicine and Biological Sciences Jack Elias wrote in an email to The Herald that the University still has a “vision for an integrated solution that further provides exceptional health care and medical education.”

“As the largest, most preferred, and most financially robust health system in the state, Lifespan remains steadfast in its commitment to our patients as well as Brown University,” Babineau wrote. Lifespan also intends to continue collaborating with “like-minded institutions” such as CNE, he added.

Uncertain Future

Talks to create a unified health system involving R.I. medical institutions were first announced 2017, when Boston-based Partners Health Care declared plans to acquire CNE. Paxson initially voiced concerns that a Partners-CNE merger would make healthcare more expensive and difficult for R.I. residents to access, The Herald previously reported. The University later became an official academic partner in the planned CNE and Partners merger, The Herald previously reported.

CNE appeared excited about Raimondo’s request for talks in June and urged that they be conducted immediately before withdrawing in July. The company declined to comment to The Herald.

After the June talks were announced and Partners withdrew, S&P Global Ratings downgraded CNE’s financial outlook from “positive” to “stable,” according to WPRI. S&P analysts told WPRI that it was “highly unlikely” that CNE could significantly improve its financial performance without acquisition by another company. CNE had lost over $53 million in 2016, The Herald previously reported.

CNE has “implemented a remarkable turnaround with significant improvements,” Fanale and Reppucci stated in their July 16 announcement. “We have exciting growth plans, clinical development opportunities, and plans for capital improvements” and are “confident and optimistic” about CNE’s future, they added.

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