Lifespan, Care New England sign definitive agreement to create integrated health system with Brown University

While observers note that the deal would increase access to care for many consumers, critics say that the merger could lead to less competition, job cuts, and a possible overall increase in health care costs.

The Andrew F. Anderson Emergency Center at Rhode Island Hospital.Pat Greenhouse/Globe Staff

PROVIDENCE — For decades, Rhode Island’s two predominant health care systems have been competitors in a relatively small market, each with their own set of financial pressures.

Lifespan Corporation and Care New England Health System have attempted to merge several times in the past, with no success. But the mounting pressure from the state, and ramifications from the COVID-19 pandemic, are bringing the two systems together again with a vision for a world-class integrated health system — and this time they’re being joined by another major player: Brown University’s Warren Alpert Medical School.

Lifespan and Care New England announced Tuesday that the organizations have signed a definitive agreement to merge and create an integrated academic health system with Brown University. In addition, Brown has committed to providing a minimum of $125 million over five years in support of the development of the integrated academic health system. Brown will participate on the governing board of the newly merged system and play a key role in integrating medical education and research with clinical practice across the combined system’s hospitals.

Lifespan owns the Rhode Island, the Miriam, Hasbro Children’s, Newport, and Bradley hospitals and is known for its work in neurology, cardiology, orthopedics, pediatrics, and cancer treatment and care. Care New England owns Women & Infants, Kent, and Butler hospitals and has expertise in family medicine, obstetrics, gynecology, neonatology, and adult psychiatry.

The integrated system will have a full array of complementary medical specialties and biomedical research to remain on the leading edge of treatment and therapies, according to the announcement.

“If you learned from your doctor the devastating news that you had cancer, you want to go to a place that maximizes your chances of having a great outcome,” said Dr. Jack Elias, dean of The Warren Alpert Medical School. “You want to go to a place where you have the best care you can get from a diagnostic and therapeutic perspective — a place that does cancer research, but that also has the latest in protocol-driven therapies so you can be with your family for many years to come. And, this is the difference that an integrated academic health system can make in patient lives. This is real.”

Christina H. Paxson, president of Brown University, said the university is committed to increasing access to excellent health care and reducing care disparities.

“Great health care should be accessible to everyone, including people from communities that historically have experienced obstacles to accessing health care,” said Paxson. “The seamless integration of research and clinical care drives improvements in the health of patients by offering all Rhode Islanders access to state-of-the-art medicine.”

Paxson said Brown’s minimum commitment of $125 million will be deployed after a merger is approved. The investment will be spent on potential initiatives in a joint strategic plan, which could include improving access to women’s health or eliminating health disparities.

While observers note that the deal would increase access to care for many consumers, critics say that the merger could lead to less competition and a possible overall increase in health care costs. The health care systems currently employ more than 23,600 people across eight hospitals, sparking questions about whether job cuts are on the horizon once the merger is complete.

This will be the fourth time Lifespan and Care New England has attempted to merge since the 1990s, and the executives at both systems will likely have a long regulatory process ahead of them. Tuesday’s announcement comes after the boards of both systems voted to sign the letter of intent to merge, which was announced in September, and was a little more than a year after similar talks collapsed.

Front row, left to right: Charles Reppucci, Chairman of the Care New England Board of Directors, Lawrence A. Aubin, Sr., Chairman of the Lifespan Board of Directors, and Samuel Mencoff, Chancellor of the Corporation of Brown University. Back row, left to right: Dr. James E. Fanale, Care New England President and CEO, Dr. Jack A. Elias, dean of The Warren Alpert Medical School, Dr. Timothy J. Babineau, Lifespan President and CEO, and Christina H. Paxson, President of Brown University. Bill Murphy/Lifespan

In June 2019, Governor Gina M. Raimondo intervened to bring Lifespan and Care New England back to the negotiation table when it looked as though Boston-based Partners HealthCare —now Mass General Brigham — would acquire Care New England. Raimondo, who is awaiting confirmation on becoming secretary of Commerce in the Biden administration, was reportedly updated over the 90 days executives at the two systems talked out a deal last summer, and executives from both systems said they have communicated with Raimondo and Lieutenant Governor Daniel J. McKee in the last few days.

“There is no question that a local, integrated health care system is in the best interest of Rhode Islanders,” Raimondo said in a statement Tuesday. “Today’s announcement will benefit patients by ensuring they have access to the highest quality of care and will spur economic growth by helping us attract top talent and solidify our position as a hub of innovation and scientific development.”

McKee, who will take over as governor when Raimondo is confirmed as Secretary of Commerce, said in a statement that the three partners have the potential to significantly improve the range and access to health care services for Rhode Islanders, but encouraged regulators to ensure that the merger will maximize all health care and economic opportunities while also protecting patients and community hospitals.

Speaker K. Joseph Skekarchi, a Warwick Democrat, and President of the State Senate Dominick J. Ruggerio, a Providence Democrat, issued a joint statement that said the legislature will be reviewing the details of the merger to ensure that patient care and health care jobs are not adversely impacted by the merger.

“We have seen in other regions the tremendous advantages that stem from a strong academic health system as an anchor tenant in a capital city,” read the statement.

Dr. James E. Fanale, president of Care New England, and Dr. Timothy J. Babineau, president of Lifespan, will now have to gain approval from the Rhode Island Department of Health, thestate attorney general’s office, and the Federal Trade Commission. The FTC will likely be the systems’ biggest regulatory hurdle, but a spokesperson for the federal agency said it does not comment on mergers or acquisitions unless it blocks a transaction. The FTC gave the systems the green light on a merger attempt in Dec. 2007, but the state rejected the application at the time, saying it was “incomplete.”

“What I am most excited about is the ability of our new, locally based, academic health system to compete at a national level, innovate, attract top talent, develop new scientific knowledge, improve the care we deliver, and serve as an economic engine for Providence and the state,” said Babineau. “This is an exciting moment in time, we cannot let it slip through our grasp yet again.”