Lifespan CEO: Failure of Lifespan-CNE merger was a factor in decision to step down

“It wasn’t the only factor, and quite frankly, it wasn’t the main factor. But it was a factor,” Dr. Timothy Babineau said. “When that got blocked, knowing what lies ahead, I thought it was time for a change for me.”

Dr. Timothy Babineau is stepping away from his post as CEO of Lifespan, Rhode Island’s largest health care system, on May 31.Bill Murphy / Lifespan

PROVIDENCE — For Dr. Timothy Babineau, the outgoing chief executive and president of Lifespan Corp., the state’s largest health care system, there was no single factor that made him decide it was time to step down.

In February, Babineau said, he watched as hospitals emerged from the winter wave of the COVID-19 pandemic. The latest merger application between Lifespan and Care New England, which included a $125 million minimum contribution from Brown University, was pending. He wasn’t seeing his teenage daughters as much as he would have liked, and he had a front-row seat to the toll that the pandemic had on hospital administrators and front-line workers. He had been leading Lifespan for nearly 10 years and was starting to think about “what comes next.”

And then Rhode Island Attorney General Peter Neronha and federal regulators denied the proposed merger.

“I will admit that the failure of (the merger) factored into my decision. It wasn’t the only factor, and quite frankly, it wasn’t the main factor. But it was a factor,” Babineau, 62, said on a Zoom call with the Globe.

“When that got blocked, knowing what lies ahead, I thought it was time for a change for me,” he said. “I thought it was time of change for the organization... I think that’s why they have term limits in politics.”

In April, Babineau announced he would step down as CEO by the end of May.

Lifespan and Care New England had attempted, and failed, to merge several times before. When Babineau joined Lifespan 14 years ago, it was during a previous attempt to merge. “I came here thinking the merger was going to happen, and it fell apart shortly after my arrival. So, you know, for the 14 years I’ve been here, I would say a day hasn’t gone by that I haven’t thought about it,” Babineau said. “But the way it was denied this time — as opposed to prior attempts — it doesn’t look like it’s going to happen anytime in the near future. And it was very, very disappointing.”

Regulators said the health care systems’ latest attempt at a deal would create a system with 80 percent market power and could potentially lead to job losses and increased cost. But Babineau pushed back on that sentiment.

“I still firmly believe that it was absolutely the right thing for the state, for our patients, the economy, and for health care,” he said. “I’ll believe that for as long as I’m around.”

Although the business community, including nonprofit entities, was in favor of the latest attempt to merge, the merger never garnered much public support. Many Rhode Islanders did not see the value in the two systems combining. Others cited experts and data, which show that deals of this size, particularly among hospital systems, can cause the cost of care to increase.

“Clearly the (public relations) strategy didn’t land where we wanted it to. But I think (that’s) right: The average Rhode Islander never fully understood the merger, never warmed up to the merger, I think. But I can tell you, it wasn’t for a lack of trying,” he said. “We thought we were doing the right thing, but the message just didn’t get where we needed to go.”

Babineau said without that merger, both Lifespan and Care New England face major financial pressures and staffing shortages. He said the system will soon be releasing a “recovery plan” that he’s been working on for the last month that he hopes will steady the hospitals’ finances. Lifespan, through the Hospital Association of Rhode Island, is requesting a portion of $150 million (other hospitals would also receive a portion of these funds) from the state’s $1.13 billion American Rescue Plan Act dollars for recruitment and retention tactics like student loan forgiveness programs, scholarship, and grant money.

Babineau, who is a surgeon, stopped seeing patients years prior, and said, at the request of Lifespan’s board, he will remain a consultant to the system through the summer. He said they are in conversations about a cancer and neuroscience research collaboration between Lifespan, Brown, and Care New England that “won’t require regulatory approvals.” He said he’ll also work on creating a unified physician organization to better streamline and coordinate care.

He said he still speaks to Dr. James E. Fanale, the chief executive and president of Care New England who is also stepping down, weekly.

Babineau’s last day as Lifespan’s CEO will be May 31. Arthur Sampson, who was previously the president of The Miriam Hospital (which is owned by Lifespan) will come out of retirement June 1 to become the system’s interim president and chief executive officer. The Board will soon launch a national search for Babineau’s replacement.

“It’s only really after the battle that you say ‘wow, that took something out of me,’” Babineau said. “But it did.”

Two weeks after announcing that he was stepping away, Babineau said he was out with his family for dinner and one of his daughters turned to him and said, “You’re a different person.”

“That’s all I needed to hear to know that I made the right decision,” he said.