PROVIDENCE – Health care workers, union representatives, executives and members of the public Tuesday weighed in on The Centurion Foundation’s proposal to purchase two hospitals from Prospect Medical Holdings and establish a nonprofit health system.
Supporters of the transaction noted the need for maintaining health care access in the state as well as the benefits of returning the facilities to local control and operating under a nonprofit health system. Opponents raised concerns about Centurion’s business model and said there are too many uncertainties about the nonprofit's proposal.
The meeting was the first of two public comment sessions Attorney General Peter F. Neronha’s Office and the R.I. Department of Health – the agencies that oversee hospital conversions in the state – scheduled to receive feedback on Centurion’s Hospital Conversion Act application to purchase Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence from Prospect and establish a new nonprofit health system.
The proposal comes as Prospect, a California-based private equity firm that took over the hospitals in 2014, is facing legal and financial troubles. PBN previously reported that Neronha’s office sued Prospect in November 2023 for violating conditions set in 2021, including failure to pay vendors that provide supplies, equipment and staff at the two hospitals on a timely basis. As of Oct. 31, the hospitals owed a combined total of more than $24 million in accounts payable to vendors that were 90 days or more past due.
Before any comments were heard, the meeting began with Prospect and Centurion executives outlining their support for the transaction.
Jeffrey H. Liebman, CEO and president of CharterCARE Health Partners, which runs the hospitals under Prospect, said the company went through a "robust" process of finding a new owner as Prospect is leaving the state. Centurion was the only viable candidate to come forward.
"Not only was this the only viable candidate, but it was also one that had a great solution," Liebman said. "This solution is good for our patients. It's good for our community. It's good for the state, and it's good for our employees."
Ben Mingle, president of Centurion, said the Georgia-based nonprofit is an expert in health care finance and corporate governance and plans to return the hospitals to local control with Liebman and his management team running the facilities.
"Centurion is competent in the ability of our management team to convert these hospitals into self-sustaining organizations, which is critical to their long-term incentive success," Mingle said, adding Centurion will place $80 million in cash on the hospitals' balance sheet and return jobs to Rhode Island if the transaction is approved.
Dr. John Stoukides, chairman of the Department of Medicine at Roger Williams Medical Center and a lifelong Rhode Islander, spoke in support of the transaction, pointing out the downsides of operating under a for-profit model.
Stoukides said Prospect initially allowed the hospitals to grow by providing funding for necessary infrastructure and establishing an administrative team. But over time, the facilities weren't able to get grant funding for academic programs or loan foregiveness to help encourage resident doctors to stay because the hospitals were operating under a for-profit entity. But more importantly, Prospect has lost interest, he said.
"We need to move on," Stoukides said.
Dr. Sudheendra Vijay, an anesthesiologist and CEO of Narragansett Bay Anesthesia LLC, also supported the transaction, noting the importance of the hospitals remaining under local leadership.
“Health care, I believe, is local … the leaders have to be there locally and that's where the investments have to happen,” Vijay said. “These hospitals have to survive; they need to be relevant to the community of Rhode Island and we want to be part of that.”
Chris Callaci, general counsel for United Nurses and Allied Professionals, a union representing more than 1,000 workers at the two hospitals, opposed the transaction saying Centurion has no plans to put its own money into the facilities but will rely largely on issuing bonds to finance the transaction. Not only would this add to the hospital’s existing debt, but Callaci said Centurion has not owned or operated hospitals before.
"At the heart of the Hospital Conversion Act is to make sure that application has proved that the viability of our health care infrastructure in this state is secured, and if this application is proved in its current form, not only will it not be secure, but the future of these facilities will be in serious jeopardy,” Callaci said.
Lynn Redding, a registered nurse and the president of Roger Williams UNAP local 5092, agreed with Callaci, saying there are too many unanswered questions about Centurion’s plans, including the services it will provide and fees it plans to charge.
“We're not saying we don't want a nonprofit, what we’re saying is that we don’t want this nonprofit,” Redding said. “We are being asked to just assume it's going to go well and, 'We'll give you everything you need after we have closed the deal.' "
Other speakers raised the question of who will take over the hospitals if not Centurion while Prospect is leaving Rhode Island. Supporters say Centurion is the struggling hospital’s last hope, and opponents reiterated concerns about whether the nonprofit’s business model is financially sustainable.
The second public comment session is scheduled for March 26 from 4 to 6 p.m in Room 110 of Alger Hall at Rhode Island College at 600 Mount Pleasant Ave., Providence, and virtually. Members of the public can also submit or amend their existing written comments by March 29. According to the Hospital Conversions Act, state regulators have until June 11 to approve or deny the proposed transaction with conditions.
(Update: Corrects spelling of Stoukides in 12th paragraph)
Katie Castellani is a PBN staff writer. You may contact her at Castellani@PBN.com.
