Partners, Care New England extend merger talks in 2018
- Partners HealthCare and Care New England (CNE) are pushing their merger talks into 2018 in the hopes of sealing a deal, The Boston Globe reported. Discussions will extend through Jan. 31.
- The two health systems — Massachusetts’ largest and Rhode Island’s second-largest — revealed they were exploring a plan for Partners to purchase CNE last April.
- CNE’s losses exceeded $6 million in October and November, largely due to the pending closure of Pawtucket-based Memorial Hospital, according to WPRI, adding an email to CNE staff from CEO Dr. James Fanale stated the "remainder of the system is close to break even."
CNE announced last August that it would close Memorial Hospital's emergency department — effectively shutting down the hospital — after talks with Prime Healthcare Foundation (PHF) to acquire the hospital dissolved. The 294-bed facility was averaging just 15 to 20 patients a day, for an operating loss of $23 million in the past fiscal year. CNE’s overall operating loss was $68 million in 2016, and the system was expecting a $49 million loss in fiscal 2017, which ended Sept. 30.
Partners recorded a $108 million operating loss in fiscal 2016, dragged down by losses at its Medicaid managed care subsidiary, Neighborhood Health Plan. The unit, which suffered an $89 million operating loss three years ago, has depressed Partners’ financials since its purchase in 2012.
However, the Boston-based system bounced back in 2017 after NHP stopped enrolling new members in MassHealth. Revenue for the year grew 7% to $13.4 billion — about $2.5 billion from NHP.
One of the conditions for a Partners-CNE merger was that CNE would divest the financially strapped Memorial Hospital. However, the timeline for that sale wavered with the merger negotiations and Prime walked away from the negotiating table, leading Partners to delay the purchase of CNE in early August. Later that month, CNE announced it would close the hospital.
Late last month, the Rhode Island Department of Health approved CNE's application to close Memorial's ED. The approval came with some stipulations, however. CNE will be required to open a walk-in clinic, provide the city of Pawtucket $300,000 for two years and initiate a transportation plan for patients needing to utilize care at other facilities.
The proposed merger and Memorial’s struggles are reflective of many hospitals and health systems that are seeing patient volumes drop in part because of the shift to lower-acuity outpatient care settings. For many providers, a merger or buyout offers the chance to remain in business while the buyer strengthens or expands it brand — in Partners’ case, to the Rhode Island market.