In a deal that detours around an onerous hospital ownership law, a Rhode Island hospital and a Boston-based regional powerhouse forged an alliance last week to compete with Lifespan Corp., which dominates the Rhode Island healthcare landscape.
The affiliation between Partners HealthCare System and Memorial Hospital of Rhode Island, in the border city of Pawtucket, involves no changes in control of assets or governance, skirting the main issues that trigger state scrutiny under a strict law regulating hospital mergers.
The alliance positions both organizations to serve a growing population of southeastern Massachusetts. And it expands the specialty prowess of Partners into Rhode Island, where Lifespan has built strengths in oncology, cardiology and orthopedics in concert with Brown University School of Medicine.
The affiliation agreement, in the works for a year, already has been shared with the Rhode Island attorney general's office, where it did not meet initial opposition, said Francis Dietz, Memorial's president.
Meanwhile, Lifespan and merger partner Care New England have been explaining to the state how, among other things, competition would be preserved if nine of Rhode Island's 14 hospitals reported to one organization.
Announced last September, the merger proposal was formally submitted in March to Attorney General Sheldon Whitehouse. Last month Whitehouse said the applicants would have to do much better at providing the minimum level of information required to make a decision, including a determination of antitrust implications (See Outliers, p. 82).
John Gillespie, senior vice president of Lifespan, said the Memorial-Partners affiliation strengthens the Lifespan stance that competition will not be compromised, because it "demonstrates the regional nature of healthcare these days, especially in New England."
A concentration of hospitals affiliated with the Brown, Dartmouth, Harvard and Yale medical schools calls for regional competition, he said. "They know they need a growth strategy, and that growth strategy does not recognize boundaries."
Partners includes Massachusetts General Hospital and Brigham and Women's Hospital, two renowned Boston teaching institutions of Harvard Medical School.
Under the alliance, Memorial and Partners will jointly develop programs in clinical specialties. No clinical areas were specifically mentioned, but efforts in the first year are expected to focus on the same three specialties for which Lifespan is best known.
"We don't back away from competition," said Gillespie. But he added, "The Lifespan hospitals have gone to great lengths to put world-class care in this small state. We believe Rhode Islanders would like to keep their healthcare local, and we intend to do just that."
Lifespan includes Rhode Island Hospital and Miriam Hospital, both specialty teaching institutions of Brown's medical school.
The alliance gives the Partners network a foothold in the Blackstone Valley area of Massachusetts, where young families have been flocking in recent years. That's the same area Memorial was targeting in a strategy to reduce reliance on Medicare and Medicaid, which now combine for 71% of annual revenues, Dietz said.
The strategy also aims to preserve a primary-care teaching affiliation with Brown's medical school, he said.