Rhode Island's two major health systems have called off plans for a merger involving their seven hospitals, citing the state's cumbersome regulatory process as a major factor in the decision.
Four-hospital Lifespan and three-hospital Care New England Health System said in a joint written statement: “Nearly three years after the initial announcement of the merger, and subsequent to submitting tens of thousands of pages of information to state regulatory agencies, there is no clear timeline to complete this process.”
The systems, both based in Providence, said Rhode Island's Health Care Conversion Act was originally designed to regulate for-profit chains attempting to enter Rhode Island from out of state, but it had instead become a barrier to a merger between two locally owned not-for-profits.
The system's executives said the extensive regulatory work had become too great a distraction during a time of mounting core-business challenges, including increases in uncompensated care, uncertainty in federal reimbursements, and acceleration in regional competition. The systems continue to believe the merger would have improved patient care and reduced costs, and will work to find other legal ways to form partnerships in the future, according to the joint statement.
