Steward Health Care System may soon be in position to become a significant player in Rhode Island's healthcare market. The Rhode Island Senate unanimously approved a bill this month that would remove a limit on the number of hospitals a for-profit company can buy in the state.
The state legislation is closely tied to the Boston-based system's effort to acquire Landmark Medical Center, a 133-bed not-for-profit hospital in Woonsocket, R.I.
Last month, Steward, which declined to comment for this story, won court approval for an amended purchase agreement that allows the company to walk away from the deal if lawmakers fail to clear the way for additional acquisitions in the state, and the state Senate described the legislation in a news release as a response to Steward's proposed purchase of Landmark and “subsequent hospital conversions in Rhode Island.” The deal also is pending approval by state regulators.
The Hospital Conversion Act, passed in 1997, prohibits for-profit companies from acquiring more than one hospital in Rhode Island every three years. The bill would remove limitations on the sale of not-for-profit hospitals. The state has 16 hospitals. Seven hospitals are part of Lifespan Corp. and Care New England Health System, both of which are not-for-profit systems. Another six, including Landmark, are standalone not-for-profit hospitals.