Friday, September 30, 2022

Attorney general denies hospital systems’ merger bid

PROVIDENCE, RI ( Associated Press) — The proposed merger of Rhode Island’s two largest health care organizations was denied Thursday by the state attorney general’s office, which concluded that it would likely reduce competition and hurt health care costs, quality and access.

Attorney General Peter F. Neronha in denying the proposed merger between Lifespan and Care New England said the merged company would have so much market power that it would be in violation of state and federal trust laws.

“Put simply, if this extraordinary and unprecedented level of control and consolidation were allowed to go forward, nearly all Rhode Islanders would see their health care costs go up, for health care that is lower in quality and harder to access,” Neronha said.

If the companies are allowed to merge, they would control 75% of all inpatient acute care hospital beds in Rhode Island; 80% of the Rhode Island market for inpatient hospital care; and 79% of the Rhode Island market for inpatient psychiatric care, he said.

He also said that the systems failed to demonstrate the financial feasibility of a merger.

“Lifespan and Care New England are each currently in tenuous financial condition,” the decision said.

“Faced with an ongoing pandemic, and despite cash infusions from federal relief funds, the parties’ own financial projections raise a substantial concern of a combined Lifespan/CNE becoming financially unstable within a few years,” the decision said.

The state attorney general’s office will also join the Federal Trade Commission’s lawsuit to block the transaction, he said.

Voicemail messages were left with spokespeople for both Lifespan and Care New England.

The organizations announced last February they had signed a merger agreement that included a collaboration with Brown University’s medical school to create what they called an integrated statewide health care system.

There had been previous efforts to merge, but the latest effort was prompted by increased cooperation between the organizations during the coronavirus pandemic.

Lifespan, the larger of the systems, operates Rhode Island, the Miriam, Hasbro Children’s, Newport and Bradley hospitals. Care New England runs Women & Infants, Kent and Butler hospitals.

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