PROVIDENCE – The birthing center at Newport Hospital will indeed remain open, but Brown Health Home Medical will be closing effective Sept. 5.
These are among the several updates to service and program offerings Brown University Health CEO and President John Fernandez outlined in a memo sent Tuesday that was obtained by Providence Business News.
Brown University Health has been considering cutting several crucial services and programs in order to reach its goal of a 3% operating margin. This benchmark is crucial to sustaining Brown Health’s mission of “caring for our patients, advancing research and training future generations” as Brown Health braces for continued financial difficulties, Fernandez said in a May 27 internal memo obtained by PBN.
Along with closing Brown Health Home Medical and keeping Newport Hospital's birthing center open, Fernandez provided the following updates to services in Tuesday's memo:
- Changes will be made to the inpatient adult psychiatry at Rhode Island Hospital including reducing reliance on contract labor, reallocating staff and investing in staff training and safety.
- The Samuels Sinclair Dental Center will remain open. Fernandez indicated the center may have to be closed in his May memo.
- Gateway Health Care will remain open in the next fiscal year, however, the Brown Health will "pursue greater operational efficiencies."
- The proposed construction project at Rhode Island Hospital has been revised as the health system is moving forward with "the most essential components."
- Service contracts for state programs will continue for the coming year.
Brown Health's fiscal year 2026 budget is still being finalizing, Fernandez said Tuesday. It was not immediately clear how much money the service updates would save Brown Health, how many staff members would be affected or when the budget would be finalized. A spokesperson for Brown Health did not immediately respond to PBN's follow up questions.
The news comes hours before an advocacy group called Moms Over Margin was set to stage a rally at 6 p.m. House Speaker Joe Shekarchi and gubernatorial candidate Helena Foulkes were both expected to appear.
Newport City Councilor Xay Khamsyvoravong, who hailed the decision, said in a statement to WPRI-TV CBS 12 that Brown’s health announcement “reflects that they are listening.” The city council previously passed a resolution urging the council to save the facility.
“We put this issue on the radar just two weeks ago and the community’s response was outstanding,” he said in his statement to WPRI.
The possibility of the birthing center being shuttered drew dozens of worried residents to a Newport City Council meeting on June 15, where they voiced their support of the center.
Gov. Daniel J. McKee said his administration has been advocating "behind the scenes" to keep the birthing center open.
"After my conversation today with Brown University Health CEO John Fernandez, I am happy to report that the Birthing Center will
not be cut from the organization’s FY26 budget, and that a task force including community members will be convened to inform future improvements to operations," McKee said in a statement shortly after Fernandez's memo was sent. "
This is excellent news for a concerned community who, like my administration, prioritizes issues of women’s health. When it comes to childbirth, the time, access, and expertise the Birthing Center provides to Newport County are essential.”
In October 2023, the health system was not meeting the goal of a 3% operating margin, but Fernandez told PBN at the time that he was optimistic that the health system would close the gap, citing the need to boost low reimbursement from Medicaid, Medicare and commercial insurers.
For hospital operators, widening that margin is vital to allow for investment into health services, improving patient access and teaching and research programs.
More recently, the health system says it has lost almost $138 million over the past two years because of underpayment for patient care from Medicaid, said Jessica Wharton, Brown Health spokesperson.
The move to cut services was based on whether the General Assembly would approve the $90 million increase in Medicaid reimbursements, which in turn would generate $270 million in funds because of a federal matching program, Fernandez said in the memo.
Lawmakers did add $15 million in state funding to increase Medicaid rates and topped up hospital funding by $38 million for increased reimbursement rates and direct support payments for hospitals.
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
