Here are four things to note.
1. The CharterCARE-owned hospital has a new consultant (who used to be an interested buyer).
Last week, Jeffrey H. Liebman, CEO of CharterCARE Hospital in Rhode Island, sent a letter to all colleagues confirming that the company had hired QHR Health to provide “consultant services.” QHR, a Tennessee-based hospital management and consulting firm, had previously met with the attorney general’s office to discuss the possibility of buying the two hospitals. According to the letter, QHR will advise Los Angeles-based Prospect Medical Holdings, the parent company of CharterCARE Hospitals, to “identify operational, financial and support opportunities.”
CharterCARE, which owns Our Lady of Fatima Hospital in North Providence and Roger Williams Medical Center in Providence, has faced management challenges in recent years. The company has long struggled financially, especially when an independent report showed that Prospect’s liabilities exceeded its assets by more than $1 billion as of September 2020 (the $1 billion in loans it took out was used to pay off nearly $5 billion) )dividend). Previously, the two hospitals had accumulated net operating losses of $88.1 million from fiscal 2015 to fiscal 2020. CharterCARE has also fought a bitter battle with local lawmakers over the change of ownership.
Prospect has been unloading its properties across the US. For example, Yale New Haven Health announced in February that it would acquire two health networks from Prospect, including three hospitals in Connecticut.
While Prospect is known to be selling two of its Rhode Island hospitals, the company hasn’t hinted at any potential deals — with their new advisor, QHR, or any other company.
A CharterCARE spokesman did not respond to The Globe’s request for comment on Monday.
According to Liebman’s letter, representatives from QHR will meet with leadership “over the next few weeks” and “pick staff” to evaluate and ultimately develop recommendations for Prospect’s consideration.
“To be clear, Prospect has not changed anything in terms of CharterCARE’s ownership, management oversight and reporting,” Liebman wrote.
QHR will initially focus on seven key areas, including market assessment, clinical quality, [analytics]revenue cycle, service line outreach, information technology and compliance.
2. Care New England claims it’s still independent…for now.
After years of merger drama, the board of Care New England, the state’s second-largest hospital system, voted unanimously last week to remain independent and not merge with other entities.
The system had previously stressed financial pressures, leaving it with no choice but to merge with another health care system.
While voting to remain independent, the beleaguered hospital group rejected offers from at least two potential acquirers: StoneBridge Healthcare, a Pennsylvania-based nonprofit that filed for $550 million in February 2022. A second bid for CNE, and Prime Healthcare, which owns Landmark Medical, is in the heart of Woonsocket. It’s unclear what Prime has to offer for Care New England.
But that doesn’t mean the hospital system will always be alone.
Care New England president and CEO Dr. James E. Fanale told the Globe last week that an offer could be considered if the “right organization” that fits the company’s culture. “But we’re not going to go out and ask,” he said.
The state and the Federal Trade Commission rejected the plan in February before Care New England’s most recent attempt to merge with the state’s largest health care system, Lifespan, whose owners had been in acquisition talks in 2019, will be sold by Mass General Brigham Acquisition (then called Partner Healthcare). The deal came to a close, but fell apart after Gina Raimondo, the former governor and U.S. Commerce Secretary under President Biden, stepped in and demanded an in-state solution.
Sources at Care New England familiar with the merger talks told Globe that there were talks between Mass General and Care New England, but they could not say to what extent.
“General Brigham is not in acquisition mode. [Beth Israel] Leahy [Health] Still doing their thing,” Fanale said. “We’ve talked to pretty much everyone — Tufts, Yale. But none of them are really in “acquisition mode.”
“But what’s going to happen in the next three to five years? I don’t see a change in the landscape. I still see people recovering from COVID-19 in the next year or two,” he said.
3. South County Health is no longer interested in Care New England
Independently owned South County Health has publicly opposed the proposed merger between Lifespan and Care New England in the past. But while the merger was still being discussed, CEO Aaron Robinson told the Globe that he didn’t think CNE-owned Kent Hospital and Lifespan-owned Newport Hospital needed to be part of the equation.
“Maybe a community health system could be formed,” said Robinson, who said he shared the ideas with the attorney general’s office and other elected officials at the time.
But in June, Robinson told the Globe that “the community health care delivery system that was originally envisioned no longer applies.”
4. Work, work, work.
While hospital executives still face lingering financial pressures, they are also struggling to quickly fill the thousands of positions that are currently vacant.
In Care New England, there are 898 vacancies. Lifespan hopes to fill 1,900 more.
“If I had a full-time paramedic, mental health worker in Butler [Hospital]and adequate women and infant caregivers [Hospital], then my finances would be better,” said Fanale, who said he did not expect any layoffs after Care New England announced it would remain independent. “If we cut other people, we wouldn’t be able to operate. “
Instead, the system has to pay more overtime and hire temporary workers through expensive personnel agencies.
“If 12 full-time nurses came in now, I would hire them on the spot,” he said.
Alexa Gagosz can be reached at [email protected] Follow her on Twitter @alexagagosz and Instagram @AlexaGagosz.