Boston's New England Medical Center went out of state for its long-awaited choice of a merger partner, but it didn't take the for-profit route that seemed a good bet just months ago.
The 434-bed academic medical center chose last week to affiliate with Lifespan, a healthcare system with a dominant position in Rhode Island and a service area that extends into southeastern Massachusetts.
New England Medical had been negotiating on and off with Columbia/HCA Healthcare Corp. for most of 1996, but Lifespan came calling after Thanksgiving and impressed board members with a vision of a regional not-for-profit healthcare network, said Thomas O'Donnell Jr., M.D., president and chief executive officer of New England Medical.
The combined multiple-state healthcare system will have a total of 1,755 licensed beds, assets of $1.5 billion, 15,000 employees and annual revenues just short of $1 billion.
Lifespan thus jumps into a market hub from which several hospital-based healthcare networks have been expanding their reach: Partners HealthCare System, centered around the affiliation of Brigham and Women's Hospital and Massachusetts General Hospital; CareGroup, with Deaconess Hospital and Beth Israel Hospital as its centerpieces; and Boston Medical Center, the merger of Boston University's teaching hospital and Boston City Hospital.
Jeffrey Prescott, spokesman for Nashville, Tenn.-based Columbia, said the company was disappointed. But he added, "We look forward to the future development of our network in New England."
Columbia has an 80% interest in a two-campus suburban Boston hospital and has reached agreement to acquire a facility in Lifespan's backyard, Roger Williams Medical Center in Providence.
Though a competitor will be strengthened as a result, Partners appeared relieved to see the deal get away from Columbia.
"We are delighted to hear that NEMC, which has been an important contributor to the New England community and to medical science nationally, is assured of going forward as an independent and not-for-profit hospital," said Samuel Thier, M.D., CEO of Partners.
Ellen Lutch Trager, an attorney and healthcare industry observer in Boston, echoed the ownership issue.
"This merger assures that NEMC will remain a nonprofit institution, and in the Massachusetts community it introduces competition to Partners HealthCare and CareGroup-which in the end is in the best interests of the healthcare consumer in Massachusetts."
New England Medical has been searching for a partner for two years.
Lifespan was formed in 1994 through the affiliation of the state's two largest teaching hospitals, Rhode Island Hospital and Miriam Hospital.