Columbia/HCA Healthcare Corp. will take its time deciding whether to proceed with its purchase of 152-bed Roger Williams Medical Center in Providence, R.I., despite predictions that a new conversion law would scuttle the takeover.
Last week, the state's Democratic-controlled General Assembly overrode Republican Gov. Lincoln Almond's veto of a controversial bill that makes for-profit companies wait three years to buy a second acute-care hospital in the state.
As a result, Rhode Island now has one of the nation's toughest barriers to proprietary chains gaining more than a toehold within its borders by buying not-for-profit hospitals. Most laws passed to date deal strictly with public disclosure in such deals.
The law, which took effect immediately, was introduced after Columbia proposed last June to buy Roger Williams for $51 million. Rhode Island has 11 acute-care hospitals, all private not-for-profits.
As anticipated, the state House of Representatives quashed Almond's veto in a landslide, voting 73 to 15 to overturn. In the Senate, however, the 32-18 vote to override squeezed by with just two votes more than the required three-fifths majority of 30.
Contrary to their stance before the votes, Columbia and Roger Williams executives are considering sticking to their original deal. They might meet to review the situation as soon as this week, Columbia spokeswoman Kelly Tolson said. "The status of the deal today is that we're planning to discuss the impact of the law and have not made a final decision," she said.
That likely will take at least several weeks, a hospital spokeswoman said.
Previously, hospital officials said an override would kill the deal. But soon after the override, Chief Executive Officer Robert A. Urcioli issued a statement reaffirming the stand-alone hospital's intent to join a larger system: "In the long term, being part of a network is necessary for success."
Even if the law does keep Columbia out of Rhode Island, it imposes new regulations that make it a Pyrrhic victory for the state's not-for-profits. Hospitals now must obtain state health department approval to discontinue certain services, under a provision commonly called reverse certificate of need. What's more, the law gives the health department sweeping powers to regulate charity care. Each March, all Rhode Island hospitals now must submit annual charity-care plans and reports to the state.
Ed Quinlan, executive vice president at the Hospital Association of Rhode Island, which opposed the law, said: "We're already a heavily regulated state in healthcare, and now we've gone to the next level."