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Consumer health care costs will not change with Lifespan-CNE merger, Brown University president says

The merged system would provide better care without increasing costs, she said, but effective low-cost care is not in the cards

Brown University President Christina H. Paxson.
Brown University President Christina H. Paxson.Brown University

PROVIDENCE — The anticipated merger between Rhode Island’s two predominant health care systems has long worried critics, who have said that a merger of this scale would lead to an increase in the cost of care. But on Friday, Brown University President Christina H. Paxson said she doesn’t think that’s going to happen in the case of Lifespan Corporation and Care New England.

“The Rhode Island health care market is actually very small,” said Paxson in an appearance on Political Roundtable, a program on The Public’s Radio hosted by Ian Donnis. “People think about this as being a big merger in the context of Rhode Island. But we all are the smallest state in the country. And we’re very integrated into the Boston market, which is actually quite concentrated.”

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In late February, the boards of both systems announced they had signed a definitive agreement to merge, with Brown University’s Warren Alpert Medical School pledging a minimum of $125 million over five years in support of the development of the integrated academic health system.

Rhode Island has strict regulations that limit increases in health care costs, Paxson noted, and the merger application will also have to gain approval from the Rhode Island Department of Health, the state attorney general’s office, and the Federal Trade Commission.

However, according to Lifespan spokeswoman Kathleen Hart, the two systems have not yet submitted their application to the state. Raina Smith, a spokeswoman for Care New England, told the Globe Friday that the merger application continues to “move along smoothly toward submission of the [Hart-Scott-Rodino Act] and Hospital Conversion Act in the coming weeks.”

According to the FTC, the Hart-Scott-Rodino Act “provides the FTC and the Department of Justice with information about large mergers and acquisitions before they occur.”

“The point that I think people don’t really appreciate is that right now, Care New England and Lifespan, compared to major healthcare systems around the country, they’re both sub-scale, they’re tiny,” said Paxson on Friday. “And bringing them together will actually create a healthcare system that is still on the small side.”

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Paxson said health care systems cannot provide effective low-cost care with a sub-scale health care system. But she said the newly merged system will provide better care to patients without costs going up. When the definitive agreement was signed, Paxson told the Globe that the university was 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,” Paxson told a Globe reporter at the time. “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.”

Lifespan and Care New England have attempted to merge several times since the early 1990s, but have been unsuccessful. Governance issues and institutional politics have largely been what has prevented the two systems to merge in the past until June 2019 when former Governor Gina M. Raimondo intervened to bring Lifespan and Care New England back to the negotiation table.

Paxson, who does not sit in the negotiation board rooms, said those governance issues aren’t getting in the way like they have in the past.

“My sense is that they are in a very, very different place than they’ve ever been before. And the COVID-19 pandemic taught them [and] really underscored how they can work together well. They can collaborate, and that coming together, you know, put the governance battles aside,” said Paxson. “These are not-for-profit organizations. Their mission is to serve the well-being of the people who live in the area. And I think they’re really fully on board with that.”

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Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her on Twitter @alexagagosz.