- Care New England (CNE), a Rhode Island healthcare system, announced this week it will close Memorial Hospital, Providence Journal reported.
- The news came after talks with Prime Healthcare Foundation to purchase the hospital deteriorated, Patch reported.
- CNE spokesman Jim Beardsworth's statement was quoted in Patch noting, "The 294-bed hospital has averaged a daily inpatient census of just 15 to 20 patients, resulting in an operating loss in the past fiscal year of $23 million." Beardsworth added CNE recorded a $68 million operating loss in 2016 and projected for a $49 million loss in fiscal year 2017, which ended Sept. 30.
It's been a rollercoaster of a year for Care New England.
For the majority of 2017, CNE has been in talks with Partners HealthCare over a potential acquisition. One of the caveats for the merger was CNE needing to shed the financially ailing Pawtucket, Rhode Island-based Memorial Hospital. In fact, state legislation was written in hopes to speed along the sale process.
However, Partners delayed the purchase of CNE in August. The negotiation process reportedly caused Memorial Hospital's sale timeline to falter a bit. At this time, the merger is not off the table as the two sides were planning to meet this fall to discuss the opportunity.
Memorial's story falls into the narrative of many hospitals and health systems this year as patient volumes have been lower than expected, due in part to patients taking advantage of lower acuity care delivery environments (CVS Health which runs minute clinics is headquartered in the nearby Woonsocket, Rhode Island). Many providers, facing lower revenues, choose to merge or get bought out so they are able to keep the lights on while the buyer scales to new markets or strengthens its grip on a region.
Partners potential merger with CNE would mean moving into the Rhode Island market, and Partners wanted to see better financials before closing the deal. Care New England, for its part, is on track to staunch operating losses compared to FY 2016, but Memorial's $23 million operating loss is a big financial blemish for its bottom line.
With the closing of Memorial Hospital, the ongoing conversations over a Partners takeover could see movement. "We look forward to continuing our due diligence process, which will now include evaluating the impact that Care New England’s new plans for Memorial will have on its overall turnaround plan," Rich Copp, VP of Communications at Partners, told GoLocal.