Care New England opts to stay independent

After pursuing a merger and considering other possibilities, Care New England says it’s going to remain independent.

Care New England’s board unanimously voted to continue to operate independently, the Rhode Island system said in a news release Wednesday.

James Fanale, president and CEO of Care New England

The system is looking at “enhanced support from various clinical and operating partners to improve liquidity and operational performance.”

Care New England is looking at partnerships with Brown University, its health plans, other area hospitals and clinical partners. The system also said it would work on arrangements with Lifespan, Rhode Island’s largest system.

Care New England, which has had financial challenges, initially sought to merge with Lifespan, and the deal would have given the combined system the majority of Rhode Island’s healthcare market.

The Federal Trade Commission said it was opposed to the deal, saying the proposed merger was anticompetitive. Rhode Island Attorney General Peter Neronha also opposed the merger. In March, Care New England and Lifespan abandoned the deal.

• Related story: FTC taking a close look at hospital mergers

In May, the system was still looking to find partners for a merger.

Care New England’s decision to stay independent followed months of deliberations and discussions, the system said in a statement. The system said it looked at a number of factors, including “any likely financial and regulatory barriers to implementing specific transactions.”

The system said it also considered the financial commitments of potential partners, as well as their experience in operating and integrating hospitals and their experience with academic health systems.

Charles Reppuci, chairman of Care New England’s board of directors, and James Fanale, Care New England’s president and CEO, issued a joint statement Wednesday.

“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,” Reppuci and Fanale said.

Care New England manages three hospitals: Butler Hospital, Kent Hospital, and Women & Infants Hospital of Rhode Island. The system also operates Care New England Medical Group, the VNA of Care New England, the Providence Center, which offers behavioral healthcare, and Integra, an accountable care organization.

Fanale has previously announced that he plans to retire early next year. He has said after his retirement, he will advise his successor and continue in a consulting role on the board.

Federal regulators have been taking a close look at proposed hospital and health system mergers in recent months. Within days, two proposed hospital deals were dropped due to FTC opposition.

HCA Healthcare had planned to buy five hospitals in Utah from Steward Health, but the systems dropped the deal following the FTC’s objections. RWJBarnabas Health and Saint Peter’s Healthcare System said they were ending their plans to merge the two New Jersey systems.

The FTC said both deals would be bad for consumers and could lead to reduced services and higher healthcare costs.

President Biden has directed regulators to give more scrutiny to the proposed mergers of hospitals and health systems.

In July 2021, Biden issued an executive order directing federal agencies to look closely at healthcare consolidations, including hospital deals, to promote competition and help protect against higher costs, reduced services and lower wages.

Hospital and healthcare merger activity plunged in the first quarter of 2022, but some analysts, including KPMG, expect a rebound later in the year. Some analysts project that smaller hospitals with financial challenges may need to merge with other organizations to stay afloat.