Boston's Partners Health is set to acquire three of Care New England's four hospitals, but has said the deal is predicated on a viable turnaround plan. CNE lost $40 million in the first half of its fiscal year.
Care New England’s Dennis Keefe announced he will retire from the financially troubled organization as of Dec. 31, 2017, after serving as president of the Providence, Rhode Island-based four-hospital system since 2011.
He will serve as a consultant for the organization for up to a year after he retires, helping shepherd the acquisition of three of its four hospitals by Partners Healthcare.
That deal is now in question because Boston-based healthcare giant has said the deal is contingent on whether the three hospitals can return to profitability relatively quickly.
“Despite our challenges and recent difficulties, I remain confident in a future of sustained financial stability for Care New England,” said Keefe, in a press release.
“That is a testament to the work we have done together, and that you will continue to do going forward. It represents the best and necessary path to ensure a strong Care New England regardless of the outcome of our important and current business opportunities.”
Care New England lost $40 million in the first half of its fiscal year, and Partners said in August that it is holding off on finalizing the acquisition until a viable turnaround plan is in place.
The two groups will meet later this month or in early October to decide whether to complete the deal, but five-hospital Lifespan, the largest health system in Rhode Island, is interested in case the Partners deal ultimately falls through.
The fourth hospital in Care New England’s portfolio, Memorial Hospital of Rhode Island, a 294-bed teaching hospital, is operating under a letter of intent to be acquired by California-based Prime Healthcare, which already owns Landmark Medical Center and Rehabilitation Hospital of Rhode Island among its 45 hospitals in 14 states.
Prime has problems of its own, as it faces a Medicare fraud lawsuit brought by a whistleblower and joined by the Department of Justice. The Prime acquisition of Memorial is expected to be completed by the fourth quarter this year, according to the Providence Journal.
James Fanale, MD, who is currently executive vice president, chief clinical officer and chief operating officer of Care New England, will take over as interim president and CEO on Jan. 1.
Many of the system’s financial problems stem from low patient volumes and its unfavorable payer mix, which relies heavily on Medicaid reimbursement.
Philip Betbeze is the senior leadership editor at HealthLeaders.