PROVIDENCE – Rhode Island’s two major hospital systems, Lifespan Corp. and Care New England Health System, announced on Wednesday that they are withdrawing their application for a merger, giving up a chance to contest efforts to block it announced on Feb. 17 by Attorney General Peter F. Neronha and the Federal Trade Commission.
Lifespan and Care New England issued a statement explaining that the board of directors for each organization met separately this week and decided not to pursue litigation to challenge the rulings issued by Neronha and the FTC. The companies said they will instead withdraw their Hospital Conversions Act application that was still under review at the R.I. Department of Health.
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Neronha and the FTC sought to block the merger due to fears that it would create a monopoly in Rhode Island’s health care market, which could have driven up costs for patients.
Lifespan and Care New England also said they’re not interested in a legislative solution known as a Certificate of Public Advantage, which would have required the General Assembly to override the decisions issued by the FTC and Neronha. Additionally, the two Rhode Island hospital companies agreed to terminate a definitive agreement that included an exclusivity clause for the two to merge.
“The organizations continue to believe the combination of the systems would have greatly enhanced the clinical, academic and research missions, reduced costs and improved the patient care environment,” according to a joint statement from Lifespan and Care New England. “Both organizations are committed to partner in ways that are appropriate from a legal perspective, and allow them to best serve the needs of the community.”
Brown University was on board with the failed merger as the academic partner, committing $125 million over five years to support the proposal. Now, according to the joint statement from Lifespan and Care New England, hospital leadership is focused on figuring out “the best path forward for the community in terms of cost, quality and access to healthcare in an extremely challenging environment.”
The news of the formal withdrawal of the merger application comes as 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 Hospital and Butler Hospital, for $250 million, with an additional $300 million more in capital investments offered as part of the deal.
Marc Larocque is a PBN staff writer. Contact him at Larocque@PBN.com. You may also follow him on Twitter @LaRockPBN.
