Merger not in cards for now, says CNE president

More of the same, with ongoing efforts to improve, would best characterize how Dr. James Fanale sees the Rhode Island health care scene following the announcement Tuesday that Care New England is withdrawing from talks with Lifespan and Brown University to create an academic medical center.

CNE, which operates Kent, Women & Infants and Butler hospitals, entered into the tri-party discussions at the urging of Gov. Gina Raimondo in early June when, in a surprise move after months of talks, Partners HealthCare of Massachusetts backed out of its proposal to acquire CNE.

Fanale, CNE’s president and CEO, said Wednesday that he does not see the collapse of the Partners deal as affecting the cost of Rhode Island health care, although had the acquisition happened, operational costs would have come down through efficiencies and, in his opinion, care would have improved as assess to capital would enable advances.

Fanale said it is a “misconception” that CNE is on the financial ropes and that either a sale or merger with another health care provider is imperative.

He said CNE lost $40 million to $50 million two years ago, but fiscal year 2018 was in the black and that third quarter numbers for the current year also put them in the black. The turnaround can be attributed to CNE’s decision to close Memorial Hospital in Pawtucket.

“We’re much stronger than where we were,” Fanale said.

Looking ahead, Fanale sees a consolidation of health care providers in Rhode Island’s future, but not one CNE would actively pursue for at least another two years.

In making the decision to break away from talks facilitated by The Rhode Island Foundation and The Rhode Island Partnership, CNE said in a release that “the Board took into account many considerations, including but not limited to, capital requirements and financial stability of the combined system, community need, anti-trust considerations, organizational stability, and implementation risks.”

CNE’s decision to leave the talks was greeted by statements of disappointment from Lifespan and the governor.

“We believe that a partnership with Lifespan, Care New England and Brown University remains the very best approach to ensure high quality, affordable health care and economic vitality for our state. We were optimistic that achieving a complete and unified academic medical center for the people of Rhode Island could become a reality and were working in good faith to achieve that goal,” reads a statement from Lawrence A. Aubin, chairman of Lifespan’s board of directors, and Timothy, J. Babineau, MD, Lifespan’s president and CEO.

They continue: “We will stay focused on ensuring that we have a strong and vibrant academic medical center for the people of Rhode Island, with a full complement of specialty and primary care. We remain steadfast in our mission of Delivering Health with Care.”

Raimondo said she has “encouraged the parties to keep an open mind, remain open to future discussions, and to continue to pursue expanded collaboration that could pave the way to further integration down the road.”

The Lifespan statements are non-judgmental compared to the campaign it mounted in its efforts to nix the Partners acquisition. In op-ed pieces written by Babineau and an advertising blitz this spring, Lifespan predicted the acquisition would drive up Rhode Island health care costs and diminish local quality of care as Rhode Island physicians lost patients, eventually forcing them to move out of state.

The acrid campaign apparently didn’t taint talks with Lifespan and Brown.

CNE said it was an active and willing participant in the discussions and that the talks had been “collaborative, mutually respectful, and held honestly and transparently.”

“The Board, leadership, and dedicated staff of CNE are fully prepared for and look forward to the opportunities ahead for our system. We have exciting growth plans, clinical development opportunities, and plans for capital improvements. We also look forward to expanding our collaboration with Lifespan and Brown University on new clinical and academic opportunities. We are confident and optimistic about the future and our place as a leading health care institution in Rhode Island. As we move forward in our mission, we will continue to serve our patients with honesty, integrity, and clinical excellence,” reads the CNE release.

CNE has long has a relationship with Brigham Health, a part of Partners that has worked on Kent Hospital’s cardiac program.

Fanale said the relationship with Brigham remains “firmly, firmly in place” following the decision of Partners and the most recent action of CNE to step away from the talks with Lifespan and Brown.