PROVIDENCE — Attorney General Peter Neronha has deemed the application for a proposed merger between Lifespan Corporation and Care New England Health System “complete.” His office now has 120 days to begin the review process.
The status of the Hospital Conversion Act application is a major part of the merger process between Lifespan and Care New England, but it does not yet mean the merger has been approved.
Neronha’s office has four lawyers and a health care expert (which the systems are paying for) who are dedicated to the regulatory process, and will have to determine if this deal will be better for Rhode Island, or at least keep the status quo. If they find the proposed merger will negatively impact Rhode Islanders’ access to care and its quality, then Neronha is expected to deny the merger. He can also choose to approve the merger with stipulations.
Now that the application has been deemed complete, the systems will have until the end of December to define what items in the document’s thousands of pages is considered “confidential.” Neronha’s office will review it, and if they agree the items can be shielded from the public (such as phone numbers and email addresses), then the application will be made public. Within the next month or two after the application is made accessible, there will be a public hearing to gather comments and Rhode Islanders also will be able to offer written testimony on the deal.
The executives at the two health care systems will also have to go through another series of interviews to ultimately define their end goals of the merger. But they, and the hospitals they lead, have gone through this process before. Lifespan and Care New England have attempted to merge several times since the late 1990s, but each effort failed.
In June 2020, the systems’ leaders agreed to return to merger talks, attempting to join forces after the COVID-19 pandemic exacerbated their financial pressures. Their boards and CEOs signed a letter of intent to merge in September 2020 and then signed a definitive agreement in February of this year.
This attempt, observers have noted, seems different because of Brown University’s partnership, which has designated a minimum $125 million to develop a world-class integrated health system. Brown is not a signatory on the application to state or federal regulators to merge, and it’s still unclear what Brown’s role is within the new system. The executives of Lifespan and Care New England have said this new system will be worth $4 billion.
Neronha, who is married to a primary care provider, is expected to be independent throughout the regulatory review process. Sources close to him say he wants to give the public ample opportunities to provide testimony, as his office has done with the debate over police body cams, and have said he knows how much is at stake with this deal.
Critics of the deal have long said that the proposed system, which would oversee 80 percent of the market’s hospital beds, would raise prices, not improve access, and could become a monopoly.
House Minority Leader Blake A. Filippi told the Globe in October the state should rethink the proposed merger.
“The right thing to do is kill this deal,” said Filippi, a Block Island Republican, who proposed that Partners, now Mass General Brigham, should be brought back into the state to consider acquiring Care New England (which was the plan from 2017 to 2019). “You give market share of 80 percent to one company and they run the table. Employees are going to suffer and patients are going to suffer all to benefit the monopoly.”
Leaders at other systems, such as Aaron Robinson, the chief executive of South County Health, the only independently owned hospital in the state, said the organization has concerns about the proposed Lifespan-Care New England merger.
“Though the talking points suggest quality would improve as these two health systems come together, really, the body of evidence suggests that when two organizations come together and create a monopoly of 80 percent market share, many times the opposite occurs,” Robinson said in March. “Quality erodes, and patient experience erodes.”
But still, Dr. Timothy J. Babineau, Lifespan’s president and CEO, and Dr. James E. Fanale, Care New England’s president and CEO, have continued to tout that this proposed deal is the best possible “Rhode Island solution” for health care. The two have only spoken on the merger publicly when news is being announced, and once over the summer for an exclusive interview with the Globe, but a website dedicated to advocating for the proposed merger has outlined what they say are their pledges and key initiatives.
In a bulleted, two-page pledge, the systems promised to be a “nationally recognized health system focused on patient-centered, high-quality care,” to create better access to high-quality health care, to focus on health care affordability, and to “focus on Rhode Island.”
Specifically, the systems said they will spend $10 million over three years to address social determinants of health, including the lack of affordable housing, food insecurity, insufficient transportation to and from medical appointments, social isolation, and unemployment. The systems said a subcommittee of the Rhode Island Foundation’s Long Term Health Planning Committee will “help guide the most effective and appropriate use of the funds.”
As for cost, the systems promised in the pledge to operate within rate caps established by the state Office of the Health Insurance Commissioner, with no appeals “for the first three years post-closing” and to achieve the cost trend target to hold the total annual health care spending increases to 3.2 percent, which was established by the Rhode Island Cost Trends Steering Committee (But health care spending per capita grew 4.1 percent between 2018 and 2019 with these systems operating on their own).
Fanale told the Globe in July the systems are working to develop their quality metrics, specific commitments, and cost-savings estimates.
“Everyone is asking about the premiums. [They are asking] what about costs? We are simultaneously working on those answers, which we will provide,” said Fanale at the time. “We’re not saying we can’t tell you [how this proposed merger] could save money. We’re trying to get a cogent, well-described presentation that we can commit to, work with regulators on, that satisfies their needs, and can be monitored based on the implementation of that plan.”
Babineau had added, “We’re doing a lot of work to try to be as specific as possible to address those concerns. It can’t just be ‘trust me it will.’ We don’t have that entire story crafted yet, but we hope to in the next several weeks.”
Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her on Twitter @alexagagosz.
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