Partners withdraws CNE merger application, Raimondo urges in-state health care system

Updated at 3:35 p.m.

GOV. GINA M. RAIMONDO has asked Lifespan, Care New England and Brown University to resume talks on forming an in-state academic medical center, following Partners HealthCare's withdrawal of its application to acquire CNE. / PBN FILE PHOTO MICHAEL SALERNO
GOV. GINA M. RAIMONDO has asked Lifespan, Care New England and Brown University to resume talks on forming an in-state academic medical center, following Partners HealthCare's withdrawal of its application to acquire CNE. / PBN FILE PHOTO MICHAEL SALERNO

PROVIDENCE – Gov. Gina M. Raimondo said a desire for a cohesive Rhode Island medical network led her to halt a proposed merger between Care New England and Partners HealthCare and called instead for talks to resume among the state’s largest health care providers.

“I decided to intervene because a number of [people] have come to me and said ‘Would you be willing to have the parties come back to the table?’ ” Raimondo said.

On Tuesday morning, Raimondo announced that she’d requested for Lifespan, Care New England and Brown University to once again try to form a collaboration.

If no agreement is reached by about the end of the summer, the proposed deal between CNE and Partners will be back on the table.

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“It’s in everybody’s best interest to move quickly,” Raimondo said.

The governor said she has little control over private hospital systems, but can request them to come together to restart negotiations.

“Partners is one of the best medical systems in the country, and we appreciate their interest in Rhode Island. Whether or not Rhode Island affiliates with a larger system at some point, I believe creating a more integrated, locally-run, academic structure first is what’s in the best interest of Rhode Islanders now and in the long run,” she said in a statement released earlier on Tuesday.

Partners withdrew its merger application in order to accommodate talks between Rhode Island entities, Dr. Anne Klibanski, its interim president and CEO, said.

“In order to give this effort the best possible chance for success and to provide maximum flexibility to the governor and the leadership of these three institutions, we will be withdrawing our application to acquire CNE. We look forward to reengaging at the appropriate time – especially with a fully integrated local system. We greatly value our relationship in Rhode Island and want to do what’s best for the state and its citizens,” Klibanski said.

Raimondo said she is not averse to a future deal with Partners, and added that the Massachusetts-based health care giant has been easy to work with.

Acknowledging that past talks between Lifespan, CNE and Brown University have been unsuccessful, the governor said she hopes the groups can move forward.

“Let’s put all that aside, let’s forget about the past and look at the vision … a thriving integrated top-notch medical system,” she said.

Partners and CNE announced a merger agreement in 2017, and were in the midst of the application process with the R.I. Department of Health and the state’s attorney general.

CNE’s application was not yet complete when Raimondo stopped the process, CNE President and CEO Dr. James E. Fanale said.

Although the network was hoping to ink the Partners deal quickly, Raimondo’s request met with cooperation.

“We wanted to get moving on our acquisition so we’d have more immediate access to capital so we could get moving on the deferred maintenance we have. … But when the governor sat down, we had to take it seriously,” Fanale said, adding that CNE’s board of directors was initially concerned at the request. “We had to give it a lot of consideration. We were the ones who had an application in, and we were far down this path, but after a lot of discussion, we agreed to (enter in-state talks again).”

Lifespan launched an opposition campaign to the potential Partners/CNE merger in late April, citing concerns over higher health care costs and the danger of patients, doctors and jobs being funneled to Boston.

Lifespan President and CEO Dr. Timothy J. Babineau praised Raimondo’s push for an in-state system.

“We are pleased that the governor has taken this important first step to achieve a vision that has eluded the state for more than two decades. We are confident that with the good faith efforts of all the parties involved, we will finally achieve the vision of unified academic health care system for the state of Rhode Island that will have a positive impact on patient care and our economy for years to come. We are excited to get this effort underway,” Babineau said in a joint statement with Lawrence Aubin, chair of Lifespan’s board of directors.

Brown University president Christina H. Paxson said she is open to talks.

“Brown has a long history of advocating for an integrated academic medical center that provides exceptional health care and medical education, and generates biomedical innovation that fuels job growth in the state. I look forward to these discussions, and I hope we can develop the beginnings of a framework that will serve the best interests of Rhode Islanders for years to come,” she said.

Although renewing talks on the creation of an in-state system drew praise from many, including U.S. Sen.Sheldon Whitehouse, at least one labor union expressed concern.

“Any consolidation of two of the largest private sector employers in Rhode Island into one health system would likely lead to job losses and increased patient cost. As the largest purchaser of health services, it is vital for the state’s policy makers and regulators to safeguard high-quality patient care and good jobs as a new round of health system discussions begin,” said Patrick J. Quinn, executive vice president of District 1199 SEIU New England.

Job loss as a result of a deal between Lifespan and CNE can’t be ruled out, Raimondo said.

Consultant work related to negotiations will be funded by the Rhode Island Foundation and The Partnership for Rhode Island, according to Raimondo’s office.

Elizabeth Graham is a PBN staff writer. You may reach her at Graham@PBN.com.

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