PROVIDENCE – Care New England Health System on July 6 announced that it would operate independently and turn down all offers to merge with other hospital groups. This came as a surprise to many, considering Care New England’s years-long attempts to find a partner.
Unions are supporting the move but others are questioning how the state’s second-largest health system will manage financially on its own.
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According to statements from CNE, the recent financial assistance granted to hospitals in the fiscal 2023 state budget has allowed the health system to address some of its immediate financial needs. CNE will also receive “enhanced support from various clinical and operating partners,” and said it is currently working on outlining the details of these arrangements.
“This plan, coupled with the financial support included in the recently enacted state budget, will help ensure that Care New England will maintain a stable operating platform and continue to fulfill its mission to care for its community of patients and support our staff,” Care New England CEO and President Dr. James E. Fanale and board Chairman Charles Reppucci said in a joint statement.
The 2023 state budget invests a total of $77.5 million in funds from the American Rescue Plan Act to support health care facilities, including $45 million to be allocated to hospitals. It also increases Medicaid rates to hospitals by 5% relative to its 2021 rates and Medicaid reimbursement rates for labor and delivery services by 20%.
The reimbursement offers significant financial support for CNE, which owns Women & Infants Hospital, responsible for about 8,500 births per year.
Health care unions across the state have shared their support of the announcement, as many had expressed concerns about the possibility of Care New England being acquired by an out-of-state, for-profit entity.
“We are encouraged by CNE’s vote to keep decisions about our health care system’s future within local control and look forward to learning more details,” said Jesse Martin, executive vice president of SEIU 1199 New England. “At the same time, it is vital that we continue to hold CNE accountable to using its public dollars toward rebuilding its workforce and investing in patient care; that includes giving frontline caregivers a seat at the table in decisions moving forward.”
SEIU 1199 NE represents 2,500 workers at Women and Infants Hospital, Butler Hospital and the VNA Care of New England.
Similarly, a spokesperson from the United Nurses & Allied Professionals said the announcement was “good news” for all Rhode Islanders.
“A sale of Care New England to any one of the out of state, for-profit suitors would have been a permanent and devastating loss,” said Brad Dufault, a spokesperson for UNAP, which represents around 2,500 employees at Lifespan Corp. and 1,500 at Care New England. “We’ve already seen it happen with Rhode Island’s two for-profit systems, who have a dismal record and continuously put shareholder profits before quality patient care. This infusion of money should not only help stabilize Care New England’s finances but also allow them to strengthen their finances going forward. Having the state’s two biggest health care providers remain nonprofit and locally controlled is an important step toward continued quality health care at these hospitals.”
Kelli Price, a registered nurse in the medical, surgical, oncology, critical care unit at Women and Infants Hospital, said, “CNE’s vote to remain independent is a positive development but the devil is in the details. We need a clear plan from CNE on how they plan to use the state and federal funding they received to retain staff, increase staffing and improve patient care.”
Both UNAP and SEIU 1199 New England had supported the now failed merger of Care New England and Lifespan because it would protect CNE from being absorbed from an out-of-state institution.
The merger was rejected by R.I. Attorney General Peter F. Neronha back in February, after Neronha argued that it would affect competition in the market and “negatively impact health care costs, quality and access to care.” He also said the proposal failed to outline in detail what the merged system would look like and what Brown’s role would be.
Neil D. Steinberg, CEO and president of the Rhode Island Foundation, said he is glad to see CNE “move forward with continued local control that will stabilize their operations to benefit the state.
“We look forward to hearing more detail and assume that the support and collaborations that CNE is working out will help ensure their financial stability going forward,” Steinberg said.
The Rhode Island Foundation had developed a series of recommendations last year for the failed merger.
“Rhode Islanders want equitable, accessible, affordable and high-quality health care that also addresses disparities of care and the social determinants of health like housing and food insecurity as detailed in the Integrated Academic Health System report we released last November,” Steinberg said. “It is important that all providers, insurers and government work together to achieve this.”
Others expressed more perplexity over the unexpected announcement.
“I had more questions than answers after reading the announcement because it was unclear to me as to how these things were supposed to happen,” said Robert B. Hackey, a professor of health policy and management at Providence College. “It was clear that they made a decision not to move forward with any other partnerships, but it was it was unclear to me as to how they would sustain the current status quo.”
While the state budget will offer significant financial relief to hospitals, Hackey said it will mainly address the operating side of Care New England’s financial needs, but it may not be enough to address its need to invest in its physical plant.
“They’re not in a great financial position,” Hackey said. “Some of their facilities are older, they need updating. I’m curious as to how they’re going to fill that need now.”
Despite being in “constant search for a partner” for decades, Hackey said the July 6 announcement made it clear that Care New England is not envisioning a merger in its future.
But he does not think this decision is permanent.
“I tend to think this is a more short-term solution and that once a new permanent CEO takes the reins, they might have a different plan,” Hackey said.
(SUBS 6th paragraph with annual birth data.)
