In one night Care New England dumped a proposed merger with Lifespan Corp. for a deal with Boston-based nonprofit Partners Healthcare, but the idea of a merger wasn’t news to Linda McDonald, president of the United Nurses and Allied Professionals union.
“This was not under wraps; we’ve been waiting … and discussing who might be a better choice,” since CNE CEO Dennis Keefe broke off negotiations with Southcoast Health, said the veteran registered nurse.
What did leave her, and the greater local health care community, stunned was the size of the new partner and the number of jobs at stake.
In an April press announcement, less than a week after the switch to Partners, CNE said layoffs of union, nonunion, clinical and nonclinical jobs took place “as a result of ongoing financial challenges” at Women & Infants, Kent and Butler hospitals and the VNA of Care New England.
In prepared remarks, R.I. Department of Labor and Training Director Scott Jensen said the occurrence of layoffs at Women & Infants “underscores the need for the hospital’s parent health care system [CNE] to get its fiscal house in order by partnering with a stable health care system.”
The state says it’s time, but what employment concerns do Rhode Island unions have with an out-of-state merger and how does this impact their outlook on future health care employment in the Ocean State?
Chris Callaci, UNAP general counsel, said the proposed merger differs from recent health care mergers due to its size. As of late April, CNE had 6,580 full-time employees on payroll and a $1.2 billion operating revenue in 2016, with a $68.3 million operating loss.
CNE, Partners and the Hospital Association of Rhode Island declined to comment on the merger’s employment impact, saying it was too early to measure job loss.
Roughly 1,500 UNAP members at Memorial Hospital in Pawtucket and Kent Hospital in Warwick could be impacted by the merger, said Callaci.
While merger details have not yet been made public, he does not expect UNAP members to be laid off because of their role as direct care or ancillary-service providers.
While a merger with Lifespan would have been the largest in Rhode Island, Callaci said, “Lifespan will do everything they can to undermine the merger” so as not to compete with Partners – which he characterized as “large, well-financed, [with] a good reputation in terms of quality and efficiency.”
Recently, Callaci explained, UNAP has been “right smack dab in the middle” of transactions, including Prime Healthcare Service’s 2013 purchase of Warwick’s Landmark Hospital and the 2013 purchase of Westerly Hospital by New London, Conn.-based Lawrence and Memorial Hospital.
“The free market has been going about its business with sales, acquisitions and joint businesses, but it’s not as if lawmakers or policymakers have shaped that,” Callaci said. “It’s been more of a reactionary setting than a proactive one where we try to manage how our health care system matures.”
Uniquely, this is also a nonprofit-to-nonprofit merger, said Callaci, who cited Landmark’s sale and Prospect Medical Holdings’ purchase of CharterCARE Health Partners in 2014 – two nonprofit-to-for-profit moves.
“Culturally, [the CNE merger] makes sense because they’re both academic nonprofits,” said Patrick J. Quinn, executive vice president of SEIU District 1199 New England, who is also concerned over the size of both parties.
SEIU represents between 2,300 and 2,400 members whose jobs could be affected, he said.
While he could not say what impact the merger will have on the future of health care employment in Rhode Island, Quinn said one of the biggest challenges facing the industry is a wave of delayed retirements resulting from the “negative fallout from 2008.”
A generation of nurses could not afford to retire when the financial crisis hit and want to do so now, he said, an impact the state will feel over the next five to 15 years.
April’s proposed layoffs, said Quinn in a statement, could be avoided if Keefe and “other high-paid administrators took a modest compensation reduction during these financially challenging times for CNE.”
Because merger details, including the number of layoffs, have not been made public, Quinn could not say whether a nursing shortage would ensue. However, he characterized hiring policies at hospitals across Rhode Island as “very conservative.”
“We need to hurry up and get people in place to be mentored and trained and impart that knowledge to the next generation of nurses,” he said.
McDonald admits constant concern over UNAP jobs and if CNE layoffs announced in April did make union members redundant, she said: “An RN with experience in Rhode Island [is] going to find work.”
Looking at the state’s history of mergers, she hopes more administrative-level consolidations occur in the future because growing health care systems are “very expensive and very top-heavy,” as “misplaced priorities” increase executive salaries rather than “focus on the bedside caregiver.”
