Reactions differ to possible Care NE, Southcoast merger

By Mary Johnson and John Howell
Posted 5/12/16

The union representing about 900 nurses and care workers at Kent Hospital is keeping an “open mind” on talks of a merger between Care New England and the Southcoast Health System, based in New …

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Reactions differ to possible Care NE, Southcoast merger

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The union representing about 900 nurses and care workers at Kent Hospital is keeping an “open mind” on talks of a merger between Care New England and the Southcoast Health System, based in New Bedford.

In an interview Tuesday, Jack Callaci, director of collective bargaining and organizing for United Nurses & Allied Professions, said the union would have a better idea of what to expect when the entities submit an application to the Health Department and the Office of the Attorney General.

“What does this mean for Kent?” Callaci asked. “Is it going to be a centralized model, or decentralized? How do they plan to work? Will they work in parallel, or will one take patients from the other?”

Looking back, Callaci said that Care New England hasn’t necessarily been a good thing for Kent. “It has become a cog in a corporate empire … what has Southcoast demanded as a condition to put the deal together?”

Warwick Mayor Scott Avedisian looks at the possible merger as an opportunity.

“I see the potential affiliation of Kent and Southcoast as a valued-added relationship. Kent Hospital has made dramatic advancements in the last decade and I do not think anyone would want to undo that progress,” he said in an email.

“There are many items that Southcoast can bring that will advance and enhance health care services at Kent. The community here is very supportive of Kent, and that shows in the way in which all of our capital campaigns have been successful. I expect that our community would make sure that the community aspects of Kent are retained and enhanced through any merger or affiliation,” the mayor continued.

Those are among the reactions to surface since Care New England and Southcoast announced late last month that they were moving forward with plans to combine.

The merger, if completed, will create a $2-billion entity encompassing eight hospitals and more than 15,000 employees, including 1,700 aligned physicians, across Rhode Island and Southeastern Massachusetts.

The announcement said the parties intended to create plans for “an integrated health system capitalizing on each organization’s strengths in patient services and population health management” and initiate the regulatory process in both Rhode Island and Massachusetts. In Rhode Island, the merger requires approval of both the health department and attorney general, under the Hospital Conversions Act, “to assure the viability of a safe, accessible and affordable healthcare system that is available to all the citizens of the state.” A review is triggered under the Hospital Conversion Act if a 20 percent or greater transfer of ownership or control is initiated.

According to Joseph Wendelken, public information officer, the health department has 120 days to render a decision after a completed application is filed. The department had not yet received an application requesting approval of the merger.

Care New England consists of Kent, Memorial, Women & Infants, and Butler hospitals; the VNA of Care New England; The Providence Center; the Care New England Wellness Center; and Integra, a certified Accountable Care Organization.

Southcoast Health is comprised of St. Luke’s in New Bedford, Charlton Memorial in Fall River, and Tobey Hospital in Wareham, in addition to Southcoast Behavioral Health in Dartmouth, a joint venture hospital with Acadia Healthcare. For about six months in 2014, Southcoast pursued a merger with South County Hospital Health Care System in Wakefield; that merger was ultimately unsuccessful.

In the proposed new system, which does not yet have a name, Southcoast Health President and CEO Keith Hovan would serve as president and CEO. Care New England CEO Dennis Keefe would become CEO of the Population Health Initiative for the unified system, according to the statement. Care New England’s Board will select the new chair of the new system’s board; Southcoast Health’s board vice chair will serve as the vice chair. Southcoast Health and Care New England will each select 10 individuals to serve on the Board of Trustees. In an interview with WPRI, Keefe said the system’s headquarters might be based in Massachusetts, rather than Rhode Island.

Both non-profit entities generate about $1 billion in revenue from treating patients, known in the industry as “net patient services revenue.” If the merger is completed, the combined system will be similar in size to Lifespan, based in Providence, currently the largest hospital system in the state. In 2014, Lifespan had 13,710 employees and net patient revenue of $1.6 billion.

Lifespan and Care New England have explored a merger three times since 1998. Three years of merger talks between Lifespan and Care New England ended in 2010 when the entities withdrew an application being reviewed under the Hospital Conversions Act by the health department and the Rhode Island attorney general.

According to a statement issued by John J. Hynes, Esq., then president and CEO of Care New England, in February 2010, “the extensive resources necessary to successfully navigate the regulatory process is detracting from our organizations’ ability to focus on sustaining our core mission to improve the health of residents in Rhode Island and the surrounding communities and to confront the increasingly aggressive posture from hospitals and health systems in the region.”

Rhode Island Public Radio reported that talks between Lifespan and Care New England were “quietly revived” for several months last year. Care New England announced exclusive merger talks had begun with Southcoast Health.

Merging the Southcoast Health and Care New England health care systems may require patients to drive longer distances for care. In an interview with the Boston Globe in November 2015, Southcoast Health’s Hovan said regionalization of services was a possibility, citing as an example: patients needing heart care might be served in a Southcoast Health hospital, while those seeking women’s care might be sent to Care New England hospitals.

The Health Care and Social Assistance sector generates more than $16 billion in revenue in Rhode Island every year and represents 19.9 percent of the state’s private sector employment, according to an April 2016 report by the Rhode Island Department of Labor and Training. Yet the health care business model has undergone significant change in recent years, straining profitability and creating financial challenges.

Southcoast Health laid off 95 employees in March, while Care New England shed 58 at Memorial Hospital, a 294-bed facility where, on average, fewer than 50 beds are being used by patients on a daily basis.

Regional consolidation concerns the unions representing health care workers. In a statement, Tyrék D. Lee Sr., executive vice president of 1199SEIU United Healthcare Workers East, said: “We will be taking steps to ensure that this new entity is better able to guarantee quality, affordable care that is accessible for patients and communities.”

The union represents members in the Southcoast Healthcare System.

SEIU 1199 New England represents about 2,000 employees at both Southcoast and Care New England. In a statement about the merger plans, Patrick J. Quinn, executive vice president SEIU 1199 New England, said, "We will evaluate the merger as specific details become available and engage in the regulatory review process in order to advocate for the hospitals that our communities deserve."

In interviews with WPRI and the Providence Journal, Keefe was more upbeat about jobs, saying he expected no immediate layoffs if the Southcoast Health merger is completed.

“If we did something more locally with an organization that was more in our market, there’d be significant job losses,” he said.

He added the new system could add jobs, particularly in primary care and population health management, because Care New England and Southcoast Health do not have a large overlap in their markets.

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