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Release Date: 11/02/2017

Memorial Hospital, a member of Care New England (CNE), today submitted its application for closure to the Rhode Island Department of Health as required by the state Hospital Conversions Act. The filing advises the Department of Health that Memorial plans to cease operations as a licensed inpatient hospital and requests the approval of the Director for the elimination of the Emergency Department and certain other services. Following the closure of the hospital, Care New England currently intends to provide certain community-based primary and specialty care services in Pawtucket. Specific to impacted employees of Memorial, Care New England is working to implement a transition plan that would help find placement throughout the system and beyond for those impacted, wherever possible.

“Today’s submission to the Department of Health represents a required and critically important step in the process Care New England carefully outlined recently,” said James E. Fanale, MD, EVP, chief operating officer and chief clinical officer. “While we move forward with this difficult, yet necessary decision, we do so with compassion for those affected and the utmost respect for the legacy of care and community that Memorial has stood for throughout its history, while striving to ensure access to care throughout the service area.”

According to the application, “At 9.3 percent occupancy, Memorial’s daily census has been significantly below capacity and below what is required to be financially viable. Due to service readiness, staffing, and operational requirements to meet licensure conditions, Memorial loses approximately $2 million per month. Given such under-utilization and unsustainable chronic financial losses, Memorial cannot continue to adequately staff and deliver patient care services in a clinically safe and financially viable manner and intends to cease all operations as soon as possible.”

The application further addresses employee support services during this transition to include, “… upcoming job fairs to be scheduled, and similar outplacement efforts. Memorial and CNE look forward to the continued assistance of, and plan to collaborate with, state and local leaders and other area medical facilities to find jobs for employees in non-CNE facilities if suitable positions are not available within CNE. CNE appreciates the current and ongoing efforts of Gov. Raimondo and other community leaders to secure commitments from other health system leaders to assist Memorial Hospital employees to find suitable employment following the closure of Memorial.”

On the issue of ongoing access to care for the community, the application details a wide range of medical facilities available immediately within the existing service area and just a few miles from Memorial Hospital. The application also highlights that Memorial and CNE leadership “… have had meetings with representatives of several hospitals and community health centers… and each has indicated the capacity and willingness to accept patients and provide services for patients transitioning from Memorial.”

Care New England believes that convening a forum comprised of representatives from Care New England, state officials, and community leadership would be an appropriate next step to identify and address the need for community-based services after the closure. A successful, cooperative, and collaborative effort that provides a thorough and thoughtful review will help to determine the best future use of the Memorial campus.

As was stated recently when the plan to close Memorial was first announced, the impetus for the changes include the chronic financial losses being incurred at Memorial, continuing a nearly 10-year slide, resulting in an operating loss in the past fiscal year of $23 million.

Care New England recorded a $68 million loss from operations in fiscal year 2016 and is projected to show a $49 million operating loss for the fiscal year that just ended on September 30. Its plan to restore financial well-being to the health care system focuses in large part on the resolution of the ongoing losses at Memorial, which is not financially viable and is not projected to ever be viable.

Since the 2013 acquisition of Memorial by Care New England, hospital leadership has worked diligently to try to make Memorial successful. This includes significant investment in clinical information systems and facility improvements, bringing in new administrative leadership, establishment of new services, initiation of marketing plans to promote the hospital and its programs, and the hiring of restructuring experts to help turn around the hospital’s dire financial situation.

Despite these efforts and a 2016 improvement plan to relocate the obstetric unit and scale back inpatient capacity, there has not been sufficient utilization and demand for hospital services at Memorial to sustain it as a safe and financially viable hospital. This is consistent with the 2013 State Health Care Planning and Accountability Advisory Council that concluded that Rhode Island has excess hospital inpatient capacity, especially in the greater Providence area where there are seven hospitals within a 10-mile radius of Memorial Hospital.

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