Fanale: Care New England merger decision may come as soon as 30 days

DR. JAMES E. FANALE, the outgoing CEO and president of Care New England Health System, said an acquisition of the Rhode Island hospital company or a merger could come as soon as 30 days from Thursday, May 26, 2022. / PROVIDENCE BUSINESS NEWS FILE PHOTO
DR. JAMES E. FANALE, the outgoing CEO and president of Care New England Health System, said an acquisition of the Rhode Island hospital company or a merger could come as soon as 30 days from Thursday, May 26, 2022. / PROVIDENCE BUSINESS NEWS FILE PHOTO

PROVIDENCE – The outgoing CEO and president of Care New England Health System said a decision regarding an acquisition of the Rhode Island hospital company, or a merger, could come as soon as 30 days from now.

Dr. James E. Fanale, who announced in May he’s stepping down as CEO of Care New England early next year, said the company’s board of directors is “working hard” to figure out the future of the hospital system and considering several formal acquisition proposals.

“These things take time, but I do expect the CNE board to make a final decision within the next 30 to 45 days,” Fanale said, in an emailed statement.

This comes after a failed merger with Lifespan Corp., Rhode Island’s largest hospital company, as Care New England seeks to overcome the financial struggles it’s been facing for years. Care New England recently posted its fiscal year 2022 second-quarter report, showing that the company lost $35.1 million in the first six months of fiscal 2022, which ended on March 31.

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Fanale has not disclosed the companies that have recently been making proposals to acquire Care New England, which operates Women & Infants Hospital, Kent Hospital, Butler Hospital and other health care facilities throughout the state, and around 7,500 employees. 

But StoneBridge Healthcare, a Pennsylvania-based hospital investment company, made a public offer in February, after state and federal regulators shot down the Lifespan merger. Following a similar offer that Care New England rejected in late 2020, StoneBridge proposed acquiring Care New England for $250 million, with $300 million more pledged in capital investments.

Fanale previously told Providence Business News that it’s possible that the nonprofit Mass General Brigham, formerly known as Partners Healthcare, could return to the table after it withdrew a prior acquisition offer in 2019, when then-Gov. Gina M. Raimondo came out against the deal in favor of a merger with Lifespan.

“We all know that Care New England’s leadership has been working hard to figure out and close on the best possible partnership for the system, that will suit our patients, workers and state in the best way possible,” said Fanale, in an email on Thursday to Providence Business News. “We have been working on this for years, truth be told, and now we have come to understand what will and will not work in Rhode Island quite clearly. That being said, we work diligently, performing detailed evaluations of all options and all aspects of the future system.”

Care New England said recently that while he is focusing on “the strategic work of how CNE will partner with others to gain financial traction,” Fanale is also now playing a “key part” of Care New England’s search for a new CEO.

Care New England is also now requesting $108.3 million from Rhode Island’s unused federal American Rescue Plan Act funding to fill staffing gaps and expand capacity. In March, the company said it had more than 900 unfilled jobs.

That’s something that’s getting the support from union leaders representing nurses and other workers at Care New England facilities.

“The state has to step up and support them, so they don’t deteriorate financially and have to make a bad deal,” said Patrick Quinn, executive vice president of Service Employees International Union 1199NE.

Fanale told WPRI-TV in a recent interview that three to five companies have inquired about Care New England. 

Fanale also told the television news broadcaster that he was stepping down from Care New England early next year for personal reasons, and that he was not being fired by the company.

Fanale told Providence Business News that he expects a public conversation of the proposals to take place this summer, as he, others from hospital leadership and the community strive to create a sustainable path forward for Care New England.

“Since we are close to making these decisions, it will not be too long before we can talk through the solutions and move into the future, stronger,” Fanale said.

Marc Larocque is a PBN staff writer. Contact him at Larocque@PBN.com. You may also follow him on Twitter @LaRockPBN.

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