RI’s Healthcare Industry Just Took Another Big Turn

Friday, April 13, 2018


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One of the largest sectors of the Rhode Island economy just took another big turn with the announcement of CharterCare’s intention to re-open Memorial Hospital — first the emergency room.  The impact would be the addition of hundreds of jobs in Pawtucket.

The implications are significant and the effort changes the narrative on the healthcare debate in Rhode Island.

The re-opening has a number of contingencies — READ HERE.  But, for Blackstone Valley and for the emergency rooms in Providence, the announcement is much needed. With the closure of Memorial, Miriam Hospital’s emergency room was repeatedly overrun and reportedly had to divert ambulances to other hospitals. And, John Holiver, CEO of CharterCare said on GoLocal LIVE on Thursday that Roger Williams Hospital saw a very significant increase in ER traffic this winter.

The closure on January 1, 2018, by Care New England and approved by Governor Gina Raimondo's administration cost the Blackstone Valley 700 plus jobs.

“Central Falls residents need a nearby community hospital for our emergency needs,” said Central Falls Mayor James Diossa. “Our rescues have been in waiting lines since the closure of Memorial Hospital, putting the health of our residents at serious risk. We took legal action to stop the closure of Memorial and now support this effort to reopen the hospital, its emergency department and to restore jobs and services to the Blackstone Valley.”

The announcement seemed to catch Raimondo’s office off guard. “We haven’t seen anything yet. We understand there is a proposal and legislation coming but nothing has been shared with the administration,” said Josh Block, Raimondo’s Press Secretary.

Raimondo’s administration oversaw the closing of Memorial and has promised to develop some other facility to serve the Blackstone region, but months later nothing has transpired.

Pawtucket State Representative Carlos Tobon says Memorial is critical to the economy

Memorial Has Been a Financial Death Zone

Both for the independent Memorial Hospital and its last owner — the financially trouble Care New England — the Hospital has been a financial sinkhole. Between the two over the past decade, the losses have neared $100 million. Holiver said that CharterCare could transform the services and believes it can be run profitably.

"We are committed to Rhode Island, and to the Blackstone Valley community.  We are prepared to invest $10 million into Memorial, and reopen this facility creating a first wave of over 100 jobs with more to come. Currently, we are the lowest reimbursed hospital system in the state. We want to work with state and legislative leaders to correct this imbalance,” said Holiver. 

New RI State Senator Discusses the importance of re-opening Memorial Hospital

Partners and Care New England

Rhode Island’s second largest healthcare group, Care New England, who has lost more than $120 million over the past two-plus years, dismissed the announcement. “Any plan to reopen the closed facility, as suggested today, is simply unfeasible especially since we previously had conversations with CharterCare about buying Memorial and those proved fruitless. Today’s announcement represents nothing more than an opportunity to muddy the healthcare landscape with an ill-conceived plan with no true thought for serving the community need,” said their spokesman.

Care New England has been in negotiations with Partner HealthCare of Boston for a year now. During that time Partners — who has an annual budget of over $13 billion which is nearly 50 percent larger than Rhode Island’s annual state budget — has yet to file any documents with the Rhode Island Department of Health or the Rhode Island Attorney General’s office relative to the acquisition. Brown University and CharterCare have porposed an alternative structure for the future of Care New England -- a proposal that they assert will be more positive for RI.


Related Slideshow: 7 Implications and Unintended Consequences of a Care New England and Partners Merger

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Providence does not usually do well in mergers

Remember Providence Gas, Fleet Bank, and Narragansett Electric?

Big employers, deep community involvement, and significant charitable donors — all were consumed and in each case, the number of employees left in Rhode Island by the succeeding company is a fraction of the once independent venture.

To the victor goes the spoils.

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As if the Boston economy isn't good enough, and the Providence economy couldn't be more stagnant

The cityscape of Boston is littered with cranes. Boston Business Journal maps the construction projects utilizing cranes in Boston (see image) and the number of projects is staggering. 

In Providence, there few construction projects and not a crane to be seen. The last thing Providence needs is for another one of its largest employers to be merged into a Boston mega-organization. The likelihood is that jobs will be lost or consolidated to Boston - basic functions like purchasing, accounting, etc. will be lost. 

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Harvard beats Brown in Ivy League match-up

Harvard Medical School is ranked as the #1 research-based institution in America by U.S. News and World Report.

Partners Healthcare’s academic partner is Harvard.

In contrast, Care New England’s academic affiliation is with the Warren Alpert Medical School of Brown University. Brown’s best ranking is 21st for primary care - and is ranked for research way back at #31.

One of the biggest losers in the merger could be Brown's medical school.

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Care New England is RI’s 2nd largest employer, so what will It be in 2 Years?

According to the RI Department of Labor and Training, Care New England is Rhode Island’s second largest employer.

Lifespan is the largest: 12,050

Care New England: 8,500

CVS: 7,800

Cities like "Meds and Eds" (the medical and educational business segments), but Providence and all of Rhode Island is likely to lose high paid, highly educated jobs as a result of this deal.

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Care New England Continues to Struggle

Despite hopes that closing Memorial Hospital would solve the financially beleaguered Care New England's economic woes, new financial documents unveil that CNE continues to struggle.

Additionally, the pursuer - Partners HealthCare - is also making cuts. The Boston Globe unveiled the Partners is cutting about 100 of the company’s tech workers that their jobs were being outsourced to India to cut costs.

“Many of the employees have worked for Partners for several years, or even decades, and are struggling with the company’s decision. Almost all are coders — people who scour patients’ medical records to pinpoint billable services — and earn upward of $40 an hour. Coders in India earn a fraction of that amount, making overseas coding an attractive way for hospitals to cut costs,” wrote the Boston Globe.

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Can the unions battle?

Within hours of GoLocal breaking the news of the merger, the United Nurses and Allied Professionals (UNAP) President Linda McDonald, RN, released the following statement today:

"This proposed merger has the ability to impact thousands of jobs and the quality of care in Rhode Island and should be thoroughly scrutinized. Like most Rhode Islanders, we only recently learned of this proposal but expect Care New England and Partners HealthCare to be transparent in their process and begin a conversation with our union about the effect any deal would have on our members and our patients.  

Memorial Hospital provides critical care to scores of Blackstone Valley residents every year and preserving its status as a fully-functioning community hospital will be among our top priorities as this process continues to unfold. 
The onus is now on Care New England, Partners HealthCare and Prime Healthcare Services to make the details of this proposal public and to do it quickly so that workers, patients and state regulators may begin asking the appropriate questions."

The nurses represents nearly 1,400 registered nurses, CNAs, ER techs, surgical techs, orderlies, endo techs, environmental employees and ancillary staff at Kent and Memorial hospitals.  But, will they have any impact on the decisions?

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Speaking of Lifespan - will they be forced to merge with a Boston partner?

Lifespan is having its financial challenges too. While Care New England lost $53 million last year, Lifespan's losses were $40 million. The Lifespan losses were smaller proportionately to the healthcare group's overall budget and it does not have the cash crunch that Care New England was battling.

In February, Lifespan announced it had has entered into another Boston Hospital agreement. This agreement with Dana-Farber Cancer Institute is a long term agreement with the goal of advancing cancer treatment and research. Lifespan previously entered into an agreement with New England Medical Center and that deal led to years of protracted litigation to unwind. Lifespan also ran into a legal battle with Tufts Medical Center.

Will Partners' potential arrival in the market force Lifespan to affiliate?


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