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By Richard Asinof
By Richard Asinof
PROVIDENCE – State regulators approved the merger of Memorial Hospital in Pawtucket into the Care New England hospital network, Dr. Michael Fine, director of the R.I. Department of Health, announced on June 26.
The decision was the second expedited 90-day review conducted by state regulators in the last six months under the Hospital Conversions Act as amended in 2012.
The state Attorney General’s office is expected to make a favorable ruling on the merger by July 3, according to spokeswoman Amy Kempe.
“We are delighted with the R.I. Department of Health’s action and we are now awaiting word from the Attorney General to round out the state regulatory approval of our affiliation,” said Care New England spokeswoman May Kernan.
In advance of partnering with Care New England, Memorial Hospital, a 294-bed acute care community hospital, had experienced serious financial stress – losing a total of more than $12 million in fiscal years 2010 and 2011, more than $13 million in fiscal 2012, and a projected $13 million in fiscal 2013, according to the 155-page document detailing the decision.
The transaction did not involve any debt financing. Care New England agreed to refinance or discharge $11 million in bond debt, and finance any operation shorfalls, estimated to be between $27 million and $36 million, through Sept. 30, 2016.
Care New England will serve as the corporate parent for Memorial Hospital; Care New England’s board of directors will be expanded to include four new members nominated by Memorial Hospital.
No elimination of any clinical services is envisioned, but certain specialty services, such as the cardiac catheterization laboratory and specialized imaging services, will be eliminated over time.
Care New England described the new partnership with Memorial as creating “a truly integrated delivery system with strong primary care as a central and unifying force.”
No date has been set for the closing of the deal.