Brown U and Prospect Medical Holdings Offer To Buy Care New England

Jan 11, 2018

Brown University and a California for-profit hospital chain announced Thursday plans to make a rival bid for Rhode Island’s second-largest health system, Care New England.

The Ivy League university’s partnership with Prospect Medical Holdings comes as Care New England is negotiating a sale to the Boston-based Partners HealthCare.  

The sale to Partners “is not in the best interests of Rhode Island,’’ Brown President Christina Paxson said in campus letter released by Brown.  “I feel strongly that letting this acquisition go forward would be wrong for Rhode Island and for Brown.”

The sale to Partners would likely increase the cost of care, reduce Rhode Island residents’ voice in the health care system and shift services – and physicians -- to Boston.

Paxson said on a conference call with reporters Partners "would inevitably, I believe, have an incentive to shift research, academics and specialty care north of the state.''

Under the Brown-Prospect plan, Brown or a nonprofit subsidiary of Brown would buy Women & Infants Hospital. Prospect would acquire Kent Hospital and other non-hospital subsidiaries such as The Providence Center. Brown also would have a right of first refusal to buy Butler Hospital. The Medical school faculty at Women & Infants, Butler and Kent would either join a Brown faculty practice plan to become university employees. 

Governor Gina Raimondo praised the Brown-Prospect proposal. “I’m encouraged that there might be even more options for Care New England’s future,'' Raimondo said in an e-email. "Having a financially sustainable hospital system in Rhode Island is critical to the health and prosperity of our people.”

But the union representing health care workers at one of Prospect's two locally-operated hospitals blasted the plan, saying it’s a “bad deal for Rhode Island patients and health care workers.”

"We find it difficult to understand why Brown University would risk its stellar academic reputation through a partnership with Prospect Medical Holdings -- an out-of-state run, for-profit corporation with a documented history of jeopardizing patient safety and care,’’  Chris Callaci, general counsel for the United Nurses and Allied Professionals (UNAP), said in a statement.  “Prospect management represents the worst in profit-based medicine and we believe this move would be calamitous for Rhode Island patients and health workers."

Care New England said the Brown-Prospect plan is designed “to acquire and split up the Care New England Health System – a process undertaken of their own independent action and interests.”

Care New England said it plans to move forward with its “exclusive discussion with Partners'' as agreed to when the two health care companies signed a "letter of intent."

Brown's Paxson said Care New England and Partners are expected to announce a decision at the end of January, when their exclusive agreement expires. 

Care New England owns three hospitals -- Women & Infants, Butler and Kent -- following last month's closure of the financially ailing Memorial in Pawtucket.

California-based Prospect owns CharterCare Health Partners, which operates Our Lady of Fatima Hospital and Roger Williams Medical Center. 

Partners, a nonprofit, owns Massachusetts General Hospital and Brigham & Women's Hospital.

updated 2:30 p.m.