Bill to place moratorium on for-profit hospital ownership transactions clears R.I. Senate

PROVIDENCE – The R.I. Senate Thursday approved legislation that would amend the Hospital Conversion Act to impose a one-year moratorium on hospital ownership transactions involving for-profit corporations. 

The bill, introduced by Senate President Dominick J. Ruggerio on March 10, would provide lawmakers and regulators time to conduct a comprehensive review of for-profit hospital ownership, as well as its impact on hospital finances and the health care system as a whole. 

“Any hospital transaction must improve care and protect Rhode Island’s patients, workers and communities. All Rhode Islanders deserve care that is accessible and affordable,”  Ruggerio said. “This legislation will ensure our state can comprehensively review the issue of for-profit hospital ownership and protect our network of hospitals, which is essential to the well-being of Rhode Islanders.” 

The plan now heads to the R.I. House of Representatives. 

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On Feb. 17, Attorney General Peter F. Neronha denied the proposed merger between Lifespan Corp. and Care New England Health System, citing the “extraordinary” control the merged entity would have over the state’s health care system.

The high degree of consolidation that would be created by the merger “would take Rhode Island’s health care market from one in which there is healthy competition to a virtual monopoly,” the attorney general’s office wrote in its decision, and would violate antitrust laws. 

On Feb. 23, Lifespan and Care New England withdrew their application for the merger with both the Federal Trade Commission and the R.I. Department of Health.

Also that day, Pennsylvania-based StoneBridge Healthcare made a second bid to buy the financially troubled Care New England. StoneBridge Healthcare offered to purchase the hospital system, which includes Women & Infants Hospital, Kent County Memorial Hospital and Butler Hospital, for $250 million, with an additional $300 million in capital investments offered as part of the deal.