As public comment on Lifespan-CNE merger begins, mixed reaction in business community

AT A SECOND public comment meeting on the proposed Lifespan Corp. and Care New England Health System merger, many participants voiced concerns that the integrated health system, which would include Brown University, would monopolize the state's health care.
R.I. ATTORNEY GENERAL Peter Neronha has denied the application for a proposed merger between Lifespan and Care New England health systems.

PROVIDENCE – Members of the public can weigh in on the proposed merger of Care New England Health System and Lifespan Corp. at the first of two scheduled public comment meetings, set for Thursday from 5 p.m. to 7 p.m.

A second meeting is scheduled next Jan. 26 from 3 p.m. to 5 p.m., and a possible third meeting may be held in early February, according to the R.I. Attorney General’s Office. The public can also submit written comments until Feb. 1.

The meetings, which are required under the state’s review process, will not include a discussion of comments, according to a spokeswoman for Attorney General Peter F. Neronha.

But the proposed merger, which the two hospitals have now attempted four times since 1998, has drawn divided reactions from the public and business community.

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Lifespan and Care New England say the proposal, which would bring the state’s two largest health entities into an integrated academic health system with Brown University, would strengthen health care in Rhode Island through expanded access to primary care and specialty treatments, in addition to creating more biomedical research and new job opportunities.

But critics of the merger have expressed concerns over the lack of competition that the combined system would face, which they say can increase patient expenses and lead to lower-quality care.

If the merger goes through, the combined system would generate around 75% of the state’s total patient revenue, according to James Bailey, an assistant professor of economics at Providence College.

For businesses outside of health care, Bailey expects the merger would have a negative impact overall, though a “relatively small one.” Most notably, the merger could drive up health insurance premiums, according to Bailey.

“Less competition is going to mean that [the merged entity is] going to be able to drive harder bargains,” he said, making it more difficult for businesses to negotiate better rates for employee health insurance offerings.

Chris Parisi, president of the Rhode Island Small Business Coalition, said that the group is “cautiously optimistic this merger can eventually lower costs for Rhode Islanders,” noting that high health care costs have a particularly significant impact on the small-business community.

But the coalition harbors concerns for small, private health care practices, Parisi said, and is “currently in the process to learn more on [the merger’s] impact for them.”

The Greater Providence Chamber of Commerce issued a statement expressing “an optimistic view about the economic development implications of the proposal.”

The Chamber cited considerations such as a need for more digital integration between systems, a “reinvention of life sciences manufacturing” with the urgency of vaccines, and “the need for the entire health care industry to look anew at its financial underpinnings and the depth of its capabilities to manage public health crises.”

In an opinion article published last month in the Providence Journal, Bruce Van Saun, chairman and CEO of Citizens Financial Group Inc., and Thomas F. Gilbane Jr., chairman and CEO of construction company Gilbane Inc. spoke in favor of the merger, calling it “an opportunity to create efficiencies and over time, potentially reduce the cost of health care across the state.”

A spokesperson for Citizens Financial Group declined to provide further comment, and Gilbane did not return a request for additional comment.

Others were reluctant to speak on the merger at all. Melissa Travis, vice chair of the Rhode Island Business Coalition, said the group would not comment at the time, and the Rhode Island office of the U.S. Small Business Administration did not return requests for comment.

In a study commissioned by Brown University released earlier this month, Missouri-based consulting firm Tripp Umbach, found that the merger would encourage growth in the state’s academic medicine industry, which currently lags behind neighboring states despite Rhode Island’s larger-than-average higher education sector.

Some have questioned the study’s validity due to its financial backing by Brown.

Last summer, the R.I. Office of the Health Insurance Commissioner released a report noting a lack of conclusive evidence that mergers improve quality, but also said that the merger presents “a compelling set of opportunities.”

Once the public comment period has closed, the Attorney General’sOffice will post all written comments and recordings of the Zoom meetings on its website.

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