Topics
More on Mergers & Acquisitions

Brown University, Prospect HealthCare throw joint hat in the ring for possible merger with Care New England

Brown President Christina Paxson announces joint merger proposal with Prospect Medical Holdings in a letter to Brown community Thursday.

Beth Jones Sanborn, Managing Editor

Credit: Care New EnglandCredit: Care New England

If a proposed merger between Care New England and Partners Healthcare doesn't work out, Brown University and Prospect Medical Holdings are teaming up and lining up as an alternative.

President Christina Paxson outlined in a letter to the Brown community an alternative to the acquisition currently being considered by Boston-based Partners Healthcare. She spelled out an alternative she and Prospect said would "create an integrated academic health system with local healthcare systems that would keep healthcare in Rhode Island, along with its economic benefits."

[Also: Care New England Health system to pay $400,000 over HIPAA violation]

Last April, Boston-based Partners HealthCare began considering an acquisition of Rhode Island system Care New England, which is also an important affiliate of Brown's Warren Alpert Medical School. In the coming months, the State of Rhode Island will decide whether to permit Partners' CNE acquisition.

Now, Brown and Prospect Medical Holdings, which owns CharterCARE Health Partners in Rhode Island, have joined forces and proposed a joint merger between them and CNE. Paxson said in her letter that the deal with Partners would not be best for Rhode Island or for Brown, expressing concern that it could lead to specialty healthcare shifting to Massachusetts, which would reduce access to care for Rhode Islanders, especially the underserved, and increase healthcare costs.

[Also: Care New England, Southcoast Health to merge, create 8-hospital system]

"If the focal point of Rhode Island healthcare shifts to Boston, excellent physicians (many of them Brown-trained) could be less likely to choose Rhode Island as a place to practice. In addition, the full economic benefits of a strong local academic health system -- one that brings in federal grants, generates spin-off companies and creates new jobs in Rhode Island-- would be lost, perhaps forever."

In the Brown-Prospect proposal, the two would acquire CNE's various facilities. Brown University or a non-profit subsidiary of Brown would acquire CNE's Women & Infants Hospital of Rhode Island. Prospect would acquire CNE's Kent Hospital and non-hospital assets, such as The Providence Center community mental health organization. Either Brown or Prospect would acquire CNE's Butler Hospital, with Brown having the right to decide. Medical school faculty at Women & Infants, Butler and Kent would either be invited to join a Brown faculty practice plan or to become Brown employees. The majority of any operating margins received by Brown would be reinvested in clinical care, medical research and education.

If the proposal was received well, Brown and Prospect would offer CNE a letter of intent and enter into a period of expedited due diligence at CNE's earliest convenience. The Brown-Prospect plan will be submitted to CNE for consideration if the Partners acquisition does not go forward, either because Partners withdraws, or its application to the state is denied, Paxson said.

"Over the long run, we envision Women & Infants Hospital and Butler Hospital -- two of the state's premier specialty hospitals -- serving as resources for all healthcare systems in the state. We also envision them as vital pieces of an integrated academic health system that includes Lifespan, Brown's valued partner in medical education and research. This integrated system would deepen collaboration with other Rhode Island health care providers, insurers and public officials to deliver affordable, high-quality healthcare," Paxson wrote.

Brown began looking for alternatives to the Partners merger with CNE after CNE announced last April that it would enter merger discussions with Partners. Paxson said Prospect has proven it is strongly invested in Rhode Island healthcare, having made strong investments in its facilities, technology and people.

Brown has a strong stake in CNE's success, as CNE hosts Brown's programs in obstetrics and gynecology and neonatology at Women & Infants; their psychiatry program at Butler; and their Family Medicine program which CNE is relocating from Memorial Hospital to Kent. Additionally, about 30 percent of Brown's medical education takes place in CNE facilities, Paxson wrote.

Right now, Paxson said, it's a waiting game, namely as to whether the state permits a CNE-Partners merger. Paxson also said in a call with local media that there have been some conversations with Partners, and they understand her concerns. 

"We are committed to working with Partners to maintain the productive relationship that Brown has enjoyed with CNE. We believe that a strong relationship with Partners would be essential to maintaining strong clinical care, medical education and research in Rhode Island," Paxson said.

Paxson said they expect some kind of announcement regarding the potential Partners/CNE merger by the end of the month.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com

Show All Comments