CNE ends negotiations to sell Memorial, closing hospital’s emergency, inpatient services

CARE NEW ENGLAND terminated negotiations with Prime Healthcare Foundation to sell Memorial Hospital of Rhode Island Monday night. The hospital will also discontinue its inpatient and emergency services. / COURTESY MEMORIAL HOSPITAL OF RHODE ISLAND
CARE NEW ENGLAND terminated negotiations with Prime Healthcare Foundation to sell Memorial Hospital of Rhode Island Monday night. The hospital will also discontinue its inpatient and emergency services. / COURTESY MEMORIAL HOSPITAL OF RHODE ISLAND

PAWTUCKET – Care New England’s board of directors terminated negotiations with Prime Healthcare Foundation to sell Memorial Hospital of Rhode Island Monday night and began planning to close the hospital’s inpatient units and its emergency department.

The board authorized Care New England management to prepare necessary plans and filings with the R.I. Department of Health to maintain vital access to primary care and outpatient services in the community.

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Care New England stated negotiations were called off because the parties were not able to reach mutually acceptable terms.

Jim Beardsworth, Care New England spokesman, confirmed Tuesday afternoon shuttering the services effectively closes the hospital.

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CNE also said that it remains committed to its affiliation with Partners HealthCare.

“I am extremely disappointed in this decision by Care New England to abandon our community hospital during their transactions, putting their agreement with Partners above the one with Prime Healthcare,” said Pawtucket Mayor Donald R. Grebien. “I think closing Memorial could have been avoided, rather than giving up on an urban community and the Blackstone Valley. Our community needs are important and should not be dismissed for profit. Memorial Hospital provides access to quality care for our residents and is one of our largest employers.”

The shuttered services at Memorial are based on chronic financial losses being incurred at Memorial, continuing a nearly 10-year slide, the company stated. CNE said that the 294-bed hospital has averaged a daily inpatient census of just 15 to 20 patients resulting in an operating loss in the past fiscal year of $23 million.

“The magnitude of the losses at Memorial cannot be sustained and jeopardizes our other hospitals and provider organizations. We have exhausted our very best efforts and those of some nationally-recognized consultants to improve the situation without the outcomes we had hoped to achieve,” said Charles R. Reppucci, chairman of the CNE board.

Care New England recorded a $68 million loss from operations in fiscal year 2016 and is projected to show a $49 million operating loss for the fiscal year that just ended on September 30. Its plan to restore financial well-being to the health care system focuses on continued work on revenue improvement and cost reduction, and resolution of the ongoing losses at Memorial.

Dennis D. Keefe, president and CEO, said the leadership of the system and the Memorial have worked diligently to try to make Memorial successful since Care New England acquired the hospital in 2013. Keefe said the turnaround effort included significant investment in clinical information systems and facility improvements, bringing in new administrative leadership, establishment of new services, initiation of marketing plans to promote the hospital and its programs, and the hiring of restructuring experts.

Care New England’s Dr. James E. Fanale, chief operating officer and chief clinical officer, said it will be the utmost priority in the plan for Memorial to continue to provide high quality patient care, while working to address options to ensure access to care for patients in the community including maintaining a robust primary care presence. CNE will also develop a plan to address the Memorial-based medical residency training program with The Warren Alpert Medical School of Brown University.

“While difficult, these actions represent a necessary and critical step in restoring financial health to Care New England while ensuring the future of hospitals and facilities many have come to rely on for their care,” continued Reppucci. “This has been a long and complex process that has been met with unrelenting dedication and compassionate care from all who work at Memorial Hospital. We will support both the employees and the community in this transition so the well-established legacy of care in Pawtucket is not lost, but rather adapted for the demands of today’s health care landscape.”

Care New England stated it will begin immediately working with the Memorial staff on transition plans. Until a definitive plan is developed and approved, there are no estimates on the number of employees who might be displaced. Care New England will attempt to place affected employees in other vacancies across Butler, Kent, Women & Infants, the VNA of Care New England, and The Providence Center.

Sen. Elizabeth A. Crowley (D-Central Falls), who said she is “saddened and dismayed” about the hospital’s closure, advocated for the R.I. Department of Heath to put the hospital into receivership.

“When Landmark Medical Center was going to close, a petition was made to the courts not to approve the closure plan, but to put the center into receivership,” said Crowley.  “I want my community hospital to be given the same protections as Landmark.  Should a return to negotiations fail, I urge the Department of Health to use the Landmark case as a model and to reject this closure plan.  I want my community protected.  I want these 700 jobs protected. There is too much at stake.”

Care New England officials say they hope to file the necessary regulatory application (Reverse Certificate of Need) as soon as possible.

Rob Borkowski is a PBN staff writer. Email him at Borkowski@PBN.com.

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