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Care New England, Lifespan merger 'only way' to stop hospital closures, some supporters say

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Supporters of the proposed merger between Care New England Health System and Lifespan say that the deal is the "only way" to prevent several hospitals in Rhode Island from closing, the Boston Globe reported July 27.

The COVID-19 pandemic caused both Providence, R.I.-based health systems to lose millions in revenue. Despite receiving federal grants to help offset some of the losses, Care New England ended the 2020 fiscal year with a $13 million loss. Lifespan received about $165 million in federal grants and posted a $21 million profit in 2020. 

Some state leaders, including Democratic Sen. Joseph Shekarchi, say that if the merger of the two health systems falls through, several Care New England hospitals may not survive. 

In particular, Mr. Shekarchi said he is worried that Care New England's Kent County Hospital in Warwick, R.I., would close.

But, Care New England's president told the Globe he is more worried about the finances of Women & Infants Hospital in Providence, which recently posted an operating loss of nearly $11 million. 

"The struggle is more at Women & Infants than it is at Kent. Kent, as a med-surgical hospital in the region, does OK," James Fanale, MD, Care New England's president and CEO, told the Globe.

But Dr. Fanale also said that the health system is "resilient" and he doesn't think the system would have to close a hospital. 

"We're not going to go belly up. We're not going to close" if the merger fails, he told the Globe.

Care New England and Lifespan signed a letter of intent to combine into one nonprofit organization in September 2020. If the transaction closes, the combined system would affiliate with Providence-based Brown University and have seven hospitals and 23,500 employees. The deal needs approval from the Rhode Island Department of Health, the attorney general's office and the Federal Trade Commission. There is a potential that the deal will fall through because as a combined entity, it would have over 80 percent market power in the state, according to the Globe. 

This isn't the first time Care New England and Lifespan have entered into partnership talks. In June 2019, Rhode Island Gov. Gina Raimondo asked Care New England to try to work out a merger agreement with Lifespan and Brown University. At that time, Boston-based Mass General Brigham, formerly Partners HealthCare, was attempting to acquire Care New England. Partners called off the deal, and talks between Care New England and Lifespan ended in July 2019. 

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