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Press Releases
| Lifespan and Care New England Announce Plans to Merge |
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07/27/07
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Combined organizations will create a financially strong
and comprehensive health care system
PROVIDENCE, R.I. (July 27, 2007) – Lifespan and Care New England (CNE) today announced plans to merge the two organizations into a single entity that will be known as Lifespan. The move will strengthen each organization’s ability to provide a range of health care services for southern New England. The announcement follows action taken last night by the CNE Board of Directors. The Lifespan Board of Directors took similar action earlier this month.
The decision to merge the systems comes after extensive discussions between the senior leadership of Lifespan and CNE, where a key focus was on how best to deliver care in an increasingly challenging financial environment and in a way that enhances and elevates each system’s strengths. The two organizations will now move forward with a due diligence process while concurrently obtaining the needed regulatory approvals to finalize the merger.
“Bringing together Lifespan and Care New England provides us with a unique opportunity to create a comprehensive and high-quality health care system that will be of great value to our patients, our employees and the community,” said Alfred Verrecchia, chairman of the Lifespan Board of Directors. “The merger will allow us to provide high levels of care in the most cost-effective way.”
Jonathan Farnum, chairman of the CNE Board of Directors, added that in light of expected reductions in Medicare and Medicaid funding, merging the two organizations makes sense. “Together, we are better positioned with the flexibility needed to withstand anticipated reductions in reimbursement, while continuing to support local teaching and research, preserve jobs and maintain our respective missions to care for the uninsured and underinsured.”
Today’s announcement marks the second time that the two organizations have embarked on merger plans. In 1998, Lifespan and CNE announced plans to combine the systems, but in 2000, the application was withdrawn.
According to George Vecchione, Lifespan president and CEO, many of the factors that made a merger attractive in 1998 still exist today and are even more pertinent considering the regional nature of competition. “Hospitals can benefit when they are part of a system. Lifespan and CNE certainly recognize this and know that now is the right time to embark on a merger. Each system is in a much different place than it was in 1998.”
John J. Hynes, Esq., president and CEO of Care New England, said, “By working together, Lifespan and Care New England can create a more cost-effective health care delivery system through economies of scale and shared corporate services that allow us to avoid duplication and overlap.”
Today, through the creation of centers of excellence at Lifespan and CNE hospitals, both are better equipped to offer specialized treatment that attracts patients and revenue to Rhode Island, while preventing the loss of revenue from within the state.
In addition, the planned relocation of Brown University’s Warren Alpert Medical School on, or near, the Rhode Island Hospital campus will create the state’s first comprehensive academic medical center.
Vecchione said, “In addition to being a hub for high-quality medical care and academic medicine, the academic medical center will be a magnet for the recruitment of medical and scientific professionals, as well as a catalyst for increased research, outside grant funding and economic development opportunities.”
Hynes noted that in addition to the benefits provided by an academic medical center on or near the RIH campus, the merger will also allow clinical staff throughout the combined systems to work in closer partnership.
“Closer links among pediatricians and OB/GYNs, emergency departments, pediatric and adult psychiatry, to name just a few, will bring a new level of care to Rhode Island,” said Hynes. “Additionally, integrated user-friendly computer systems will allow physicians to have access to patient records in their offices, resulting in minimal duplication of tests, faster admissions for patients, and quicker access to lab tests—all allowing treatment to be delivered in a more seamless fashion.”
Other clinical enhancements that would occur under the merger:
Butler Hospital will create the state’s first Brain Sciences Institute, which will support research, education and behavioral health treatment. In addition, the Butler campus would be sold or otherwise developed to fund a new Butler Hospital facility on or near the RIH campus.
Kent Hospital will apply to become a level II trauma center and will also seek to create an emergency medicine residency program. Together, these improvements will enhance statewide disaster responsiveness.
Women & Infants will retain its leadership role in neonatal and women’s reproductive health. There will also be a greater opportunity to develop services for conditions that disproportionately affect women and to maximize Women & Infants’ referral network and strong regional presence.
Continuation of Care New England’s VNA under the Lifespan system.
In the new organization, Lifespan will continue to maintain the chairmanship of the board of directors and CNE’s chair will serve as a vice chair. In the first year of the merger, the Lifespan Board of Directors will expand from 17 to 25 members and will include the three board chairs from Butler Hospital, Kent Hospital and Women & Infants Hospital, as well as five at-large members from CNE. The corporate structure of the affiliates will remain the same and the governing boards will continue providing oversight credentialing and quality assurance of their respective institutions.
Vecchione will be president and chief executive officer for the merged system. Hynes will become senior vice president for special projects.
The agreement also notes that all prior and future gifts, bequests and endowments will remain the assets of the affiliate to whom they were donated. In addition, they will remain under the exclusive direction and control of the governing body holding the assets.
About Lifespan
Lifespan (www.lifespan.org) is a not-for-profit health care system based in Providence, RI. Formed in 1994, Lifespan includes three teaching hospitals of The Warren Alpert Medical School of Brown University: Rhode Island Hospital and its Hasbro Children’s Hospital; The Miriam Hospital; and Bradley Hospital, the nation’s oldest psychiatric hospital for children. Lifespan also includes Newport Hospital, a community-based hospital in Newport, RI. Lifespan hospitals combined rank 9th in the nation for research and training grants from the National Institutes of Health, receiving more than $44 million each year. Lifespan also has been recognized nationally for being at the leading edge of technology in health care, winning the 100 Most Wired, 25 Most Wireless, CIO 100, and CEO IT Achievement awards and being named a finalist for the 21st Century Achievement Award from the Computerworld Honors Program.
About Care New England
Care New England, located in Providence, was founded in 1996 by Butler Hospital, Kent Hospital and Women & Infants Hospital. Care New England is a not-for-profit health care system that offers a continuum of quality care. Our system includes two teaching hospitals affiliated with The Warren Alpert Medical School of Brown University, Butler and Women & Infants; a community hospital, Kent; a visiting nurse and home care/hospice agency, Care New England Home Health; and two Care New England Wellness Centers. Care New England has 6,439 employees, 1,519 physicians, 613 licensed beds and 162 infant bassinets (FY06 statistics). For more information about Care New England, please visit www.carenewengland.org . |
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