The merge, the money, the medicine
Rhode Island’s biggest healthcare systems, Lifespan and Care New England, have initiated their merger. To integrate the two health systems, Lifespan and Care New England have also partnered with Brown University’s Warren Alpert Medical School. Brown has committed to providing a minimum of $125 million dollars over a five-year span. Together, the university and the merged healthcare systems have created an integrated academic health system. The AHS is meant to help better performance in key categories: clinical process, patient experience, mortality and rate of readmission after discharge.
The merger combines Lifespan’s Rhode Island, Miriam, Hasbro, Newport and Bradley Hospitals, and Care New England’s Women & Infants, Kent, and Butler Hospitals. This effort creates a Rhode Island nonprofit academic medical system, which is expected to employ more than 23,500 employees.
This deal will mark the fourth attempt Lifespan and Care New England have made to merge in nearly three decades. Critics of the merger have cited that this deal would result in Lifespan, Care New England and Brown owning nearly 80 percent of the market. Chief Executive of South County Health, Aaron Robinson, said, “Certainly in its current configuration, we believe any 80 percent market provider could have negative impacts on smaller health systems within that same market.”
Lifespan CEO, Tim Babineau, has recently come under fire for his top-tier salary. Tax documents for 2019, the most current year available, reveal that Babineau received more than $2.2 million in compensation. GoLocalProv cites his pay as $1,928,054 in salary and $318,064 in additional compensation.
In 2020, Lifespan gave out “special management compensation” bonuses to top executives after receiving more than a hundred million dollars in federal CARES Act funding. The company refused to say how much CARES Act funding they have received to date, and defended the bonuses. Lifespan spokesperson Kathleen Hart said, “This fiscal year Lifespan provided a one-time performance recognition award to a very small number of mid-level managers who went above and beyond their service during the COVID-19 crisis, working hundreds of extra hours on nights and weekends without being compensation because they are salaried employees.”
How the merge will affect the finances of Lifespan and Care New England is uncertain. Lifespan executives are highly paid while Care New England is in a growing unfunded pension obligation.
Former Rhode Island Director of Health Dr. Michael Fine called upon Rhode Island Attorney General Peter Neronha and the Rhode Island Department of Health (RIDOH) to investigate Lifespan and Care New England for vaccinating non-medical board members not eligible for vaccinations under the state’s Phase one guidance. Fine said, “I really think the Attorney General should use the power vested in him in the oversight of nonprofits to move against their nonprofit status. I don't think we should play games like this -- this is a pandemic and a time of a great sort of social instability.”
Despite the company receiving hundreds of millions in taxpayer support, Rhode Island Hospital, Lifespan’s largest hospital is set to hold a telethon. Press releases for Lifespan read “Rhode Island Hospital, in partnership with NBC 10 WJAR, will celebrate its excellence in care during the inaugural Day of Giving on Thursday, March 25, 2021…[and] will showcase the hospital’s commitment to patient-centered care and its responsiveness to the ongoing global pandemic, while raising critical funds in support of its life-saving mission."
The merger requires the approval of both federal and state agencies which Lifespan, Care New England and Brown anticipate will take several months. For more information about the integrated academic health system visit healthierri.com.