Some view the Centurion Foundation’s proposal to buy Roger Williams Medical Center and Our Lady of Fatima Hospital from Prospect Medical Holdings as a chance to rescue the cash-strapped hospitals, but some employees at both hospitals aren’t convinced.
If the transaction is approved, the hospitals, which are run by Prospect subsidiary CharterCARE Health Partners, would return to nonprofit status operating under a newly formed health system. Since November 2022, the nonprofit Centurion has sought to acquire the hospitals from Prospect, a private equity firm. After multiple delays, the R.I. Department of Health and Attorney General Peter F. Neronha’s office – the two agencies that oversee hospital conversions in the state – finally deemed the application for the transaction complete in December.
But when state regulators announced that they could begin reviewing the application, the United Nurses and Allied Professionals – which represents nearly 1,000 workers at the two hospitals and Prospect Home Health and Hospice – raised alarms that Centurion officials had stalled on formally committing to protections against layoffs, hospital closures and termination or reduction of services.
Without these commitments, the union would not be able to support the transaction, union president Lynn Blais said in December.
And on Feb. 6, Christopher Callaci, general counsel at UNAP, said the union still had not taken a stance on the transaction as union leaders continue to review the lengthy application, which was made public on Jan 29.
That said, the union has expressed serious concerns over the lack of progress in discussions with Centurion that started in November 2022. After an initial meeting, there was little follow-up from Centurion, so UNAP issued a detailed written proposal the following May. The two sides met inconsistently after that, but talks have ramped up since the application was made public.
The application indicates Centurion has no plans to reduce health care services or staff. There is potential to add about 200 jobs, Centurion said in the application, which also references the importance of offering employees competitive benefits.
That’s encouraging for union officials, but Callaci said the union is troubled by a lack of a labor agreement. He said time is running out to strike a deal. Without an agreement, the union plans to submit written comments in opposition to the sale and testify against it at public hearings that state regulators will host as part of the application review process.
Otis Brown, spokesperson for CharterCARE and Centurion, said in a statement that “Centurion continues to have regularly scheduled meetings with UNAP leadership covering a wide range of issues,” and the foundation is “encouraged by the progress and looks forward to future discussions.”
How will state regulators weigh UNAP’s concerns?
RIDOH spokesperson Joseph Wendelken said two of the nine statutory criteria in the Hospital Conversion Act apply to issues raised by the union: The department will assess the commitment to the continuation of collective bargaining right and workplace retention, and it will assess the “estimated future employment needs under the conversion, and retraining of employees who may be impacted by the proposed restructuring.”
“We are carefully weighing the applicants’ submission now, relative to these criteria and the other decision criteria outlined in statute,” Wendelken said in a statement. “The decision we issue will be intended to ensure a safe, accessible, and affordable health care system for all Rhode Islanders.”
While the union has yet to throw its support behind the transaction, others say shifting hospitals into a nonprofit system could be a benefit overall for Rhode Island’s health care landscape.
Robert Hackey, professor of health policy and management at Providence College, said there are concerns about profit-minded companies owning hospitals nationwide and then unloading or closing unprofitable ones. A chilling example is in Massachusetts, where the for-profit Steward Health Care System’s financial woes have put the fate of its nine hospitals in doubt.
And while Prospect is facing its own battles, including legal challenges from Neronha’s office and closing other Prospect hospitals in the U.S., Hackey said this transaction could be the best way of preventing a similar crisis in Rhode Island.
“We're actually seeing an infusion of investments with this deal,” Hackey said, noting Centurion plans to invest $80 million that would be generated from bond issuances for various hospital improvements. “I think it is a real win for Rhode Island.”
Still, Callaci said the union is wary about Centurion’s business model and it’s unclear whether the $80 million will be enough to help operate Roger Williams Medical Center and Our Lady of Famita Hospital as outlined in the application. He said the union plans to raise these topics in upcoming discussions with Centurion.
Brown said Centurion’s business model “reduces operating costs by eliminating earnings pressure caused by private equity ownership” and that this has allowed the nonprofit to previously stabilize health care facilities. In CharterCARE’s case, this begins with returning the hospitals to charitable status and bringing in local management and oversight. The application also outlines Centurion’s plan for a secure financial future that includes reducing the cost of care and returning previously outsourced jobs to Rhode Island, Brown said.
(Updated to add further comment from Centurion on its future financial plans.)
