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Lifespan, Care New England withdraw merger application

by John R. Fischer, Senior Reporter | February 28, 2022
Business Affairs
Lifespan and Care New England have withdrawn their application to merge with one another
Lifespan and Care New England will not be merging following opposition from the Rhode Island attorney general and the Federal Trade Commission.

In the works since last March, the agreement would have turned the two into one entity with up to 80% ownership over the state’s hospital infrastructure. But criticism that the deal would decrease competition and possibly increase overall healthcare costs led Attorney General Peter Neronha to reject the proposal this month and file a lawsuit with the FTC to block it from moving forward.

As a result, the two chose to withdraw their application to combine. They also have terminated their exclusive negotiating agreement, which will allow them to pursue mergers with other healthcare organizations, reported The Brown Daily Herald. “Both organizations are committed to partner in ways that are appropriate from a legal perspective and allow them to best serve the needs of the community," said CNE and Lifespan in a statement.

The merged entity would have consisted of eight hospitals with more options for protocol-driven therapies, according to Care New England and Lifespan. It would also eliminate health disparities and improve access to women’s health.

Backing the deal was Brown University’s Warren Alpert Medical School, which contributed $125 million toward it in the hope of forming an academic medical center through the deal. “Brown remains steadfastly committed to supporting the work of the physicians who work in both Lifespan and Care New England, serving the health of Rhode Islanders and fueling the local economy through the teaching, research and service conducted by the Warren Alpert Medical School, Brown’s School of Public Health and other academic departments and programs,” President Christina Paxson told The Herald.

Lifespan and CNE have been attempting to combine since the 1990s, with the current deal being their fourth try. The FTC approved of a deal back in 2007, only for the state to reject it on the grounds that it was incomplete.

Under the Hospital Conversions Act, both organizations could have appealed the Neronha’s rejection of the merger in court. They also could have sought a certificate of public approval from the attorney general’s office to allow the merger to move forward despite antitrust concerns of the FTC, reported WPRI.

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