PROVIDENCE – St. Joseph Health Services of Rhode Island and Roger Williams Medical Center yesterday filed a roughly 27,000-page application with the R.I. Office of the Attorney General and the R.I. Department of Health to affiliate under a new holding company, CharterCARE Health Partners.
The deal – first announced in April (READ MORE) – must now undergo state review under the R.I. Hospital Conversion Act. The never-before-completed process, including public hearings, is expected to take nine months or longer.
If the plan is approved, CharterCARE will control 579 licensed hospital beds, employ about 3,200 people and have about $330 million in annual operating revenue, the hospitals said. Roger Williams President and CEO Kenneth H. Belcher would hold the same ranks within CharterCARE, while St. Joseph President and CEO John M. Fogarty would become the new company’s executive vice president and chief operating officer.
In a joint interview, both executives stressed that the merger’s goal is to ensure patients’ access to care. “This isn’t about us building a large empire,” Belcher said. “This is about making sure these two organizations are strong moving into the future.”
The merger is expected to lead to integration and consolidation of services, both sides said, and to “significant operating efficiencies in administrative and other overhead costs.” The two also said they see opportunities to develop “centers of excellence” in several fields.
The combined entity would have a market share of about 22 percent in Greater Providence and 15 percent statewide, giving it “the size and scale required by hospital providers to compete in today’s heath care economy,” the hospitals said.
St. Joseph currently operates Our Lady of Fatima Hospital in North Providence, St. Joseph Hospital for Specialty Care in Providence and the St. Joseph Living Center on Federal Hill. It has an operating budget of more than $180 million and about 1,900 employees.
Roger Williams operates its hospital along with Elmhurst Extended Care and home care services. It has a total operating budget of more than $163 million and about 1,400 employees.
Together, the two hospitals last year had about 18,500 inpatient admissions, nearly 460,000 outpatient visits and about 60,000 emergency room visits, Belcher said.
Attorney General Patrick C. Lynch, in a statement about the merger plan, described the two hospitals as “extremely important charitable institutions that provide critical health care services for many Rhode Islanders” and also employ thousands of people. Lynch said his office would review the application “in the obvious context of Rhode Island’s pressurized and ever-evolving health-care landscape.”
He described the hospitals’ filing – comprising 24 boxes’ worth of paperwork – as the only “completed” merger application state officials have received, even though both his office and the Health Department “have worked tirelessly” with Lifespan and Care New England on the health care systems’ own application. (READ MORE) A third application, by Landmark Medical Center, which has considered merging with Memorial Hospital of Rhode Island (READ MORE), was stalled after Landmark went into receivership and is not expected to proceed, he said.
In that context, Lynch said his office would get to work right away on reviewing the CharterCARE proposal, but warned that “we cannot predict … what additional assets will be required should another application arrive” while that review is pending, or how such a filing might affect officials’ ability to process the documents.
Belcher and Fogarty both said they realize the process is going to take time – and they noted that getting their side of the paperwork done in about eight months had been “lightning speed,” as Fogarty put it, given the scope of the work involved. During that period, Fogarty added, the need for a merger has only grown, because of the decline of the economy and cuts in government funding.
Before filing the application yesterday, the two hospitals held meetings with their employees, at which Belcher said the message was that “people should not be nervous” about the deal.
“We have made no plans to reduce the number of employees,” he said. “Our plan, though, is to be as collaborative and as strong as we can be so that we can continue to invest in our employees, in our facilities, to make sure that quality remains strong.”
In a joint news release, the hospitals said they want to continue to maintain separate hospital licenses and governing boards, which in turn would be overseen by a 15-member CharterCARE board with oversight of system finances and strategic planning.
Roger Williams would remain a secular, academic organization, while St. Joseph would continue to operate under the sponsorship of the Roman Catholic Diocese of Providence, the hospitals added. Their affiliation would be structured to meet the requirements of church canonical law governing mergers of Catholic hospitals with secular hospitals.
Roger Williams Medical Center and its nearly 1,400 employees provide a broad range of adult health services to residents of Rhode Island and nearby Massachusetts. It is an affiliate of the Boston University School of Medicine and Elmhurst Extended Care. Additional information is available at www.rwmc.org.
St. Joseph Health Services of Rhode Island – a nonprofit health care system that is associated with but not financed by the Roman Catholic Diocese of Providence – includes the St. Joseph Hospital for Specialty Care, Our Lady of Fatima Hospital, the St. Joseph Living Center, the St. Joseph School of Nursing and the Southern New England Rehabilitation Center. Additional information is available at www.SaintJosephRI.com.
Information about the new CharterCARE Health Partners will be made available at CharterCARE.org.
