Practice Management News

Partners HealthCare Pulls Out of Hospital Merger Deal with CNE

Partners HealthCare will no longer pursue a hospital merger deal with Care New England following CNE's reopening of negotiations with Rhode Island stakeholders.

Partners HealthCare and hospital merger

Source: Xtelligent Healthcare Media

By Jacqueline LaPointe

- Massachusetts-based Partners HealthCare is backing out of a hospital merger deal with Care New England (CNE) after Rhode Island’s governor called for a more local solution.

In a statement on her website, Governor Gina Raimondo announced that Providence, RI-based CNE will reopen hospital merger negotiations with LifeSpan and Brown University despite signing a definitive agreement to merge with Partners in January 2018.

“Over the past several months I have increasingly heard from a number of stakeholders and understand the appeal of a locally-run, academic medical center based in Rhode Island,” Governor Raimondo stated. “With that in mind, I have called on Care New England, Lifespan and Brown to sit down once again and consider a joint solution.”

Governor Raimondo acknowledged that Partners is one of the best medical systems in the country and expressed appreciation for their interest in CNE. However, she believes “creating a more integrated, locally-run, academic structure first is what's in the best interest of Rhode Islanders now and in the long run.”

In response, Partners interim president and CEO Anne Klibanski, MD, said the health system withdrew its application to acquire CNE “in order to give this effort the best possible chance for success and to provide maximum flexibility to the governor and the leadership of these three institutions.”

Since announcing their intentions to merge, Partners and CNE have faced staunch opposition from healthcare stakeholders in Rhode Island even though the deal received state and federal approval.

“[The merger] is likely to lead to specialty healthcare shifting to Massachusetts, impeding access to healthcare for Rhode Islanders and especially for members of the state’s underserved communities,” Brown University president Christina Paxson wrote in letter to the community following the announcement. “It also would likely increase the cost of care and reduce the ability of Rhode Islanders — consumers, businesses, healthcare workers and policy-makers — to have a voice in how our healthcare system works.”

Rhode Island’s largest health system, Lifespan, also opposed the proposed deal between Partners and CNE. The health system even launched a public campaign opposing the merger in April 2019.

“Allowing such an acquisition to move forward would have devastating consequences for Rhode Island and its healthcare delivery system, now and for years to come,” Lawrence Aubin Lifespan’s board of directors chairman, said in an announcement.

Brown University and Lifespan put their own merger deals on the table in an effort to sway CNE from merging with Partners. CNE and Partners briefly considered including Lifespan in merge negotiations, but the three health systems ended talks in October 2018.

CNE stood by the decision to merge with Partners, which employs 6,500 physicians and 9,100 including those at Brigham and Women’s Hospital and Massachusetts General Hospital, two of the nation’s leading academic medical centers. Partners also operates its own health plan.

The deal with Partners promised to bring some much-needed financial stability to CNE, which experienced a $115 million loss during the two fiscal years preceding the announcement of the deal with Partners.

However, pressure from local stakeholders has CNE reconsidering their deal with Partners.

"Care New England is committed to providing the best health care possible throughout the state. We appreciate the Governor's dedication and commitment, and respect the importance of a possible Rhode Island Solution involving CNE, Lifespan, and Brown University. To that end, we have agreed to further explore the feasibility of this option and will begin discussions in earnest immediately because it is simply too important for Rhode Island's future," James E. Fanale, MD, CNE president and CEO, said in the statement on Governor Raimondo’s website.

CNE will continue existing affiliations with Partners and its hospitals, including programs already in place for cardiology, colorectal, thoracic, and vascular surgery.

Partners also stated that the health system is open to “reengaging at the appropriate time – especially with a fully integrated local system.”

“We greatly value our relationship in Rhode Island and want to do what's best for the state and its citizens," stated Klibanski.