5 Things You Need to Know About Lifespan - CNE Mega-Merger
GoLocalProv News Team
5 Things You Need to Know About Lifespan - CNE Mega-Merger
The company, if it can clear federal and state review, will employ nearly three times more than any other corporation in Rhode Island. It will pay no taxes.
United Nurses and Allied Professionals President Lynn Blais, RN issued a statement after Lifespan and Care New England announcement, stating, “Any new entity that would combine two of Rhode Island’s largest healthcare providers and employers must be painstakingly scrutinized to ensure that it is in the best interest of patients and frontline health workers. Our priority is the protection of critical, local services and jobs at our community hospitals."
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST"We look forward to continuing a thoughtful and productive dialogue with Lifespan and Care New England about this process, and while we see the potential in this proposed new entity, we remain skeptical without the assurance of a formal agreement on services and jobs,” added Blais.
Another major union at the facilities, SEIU raises additional concerns. Patrick Quinn, Executive Vice President of SEIU 1199 NE said, "Any changes to the current health system and the hospital system in particular needs to focus on improving health care delivery access to Rhode Islanders. A transaction of this magnitude between the first and third largest private sector employer in the state would change the entire economy of Rhode Island."
"We need to proceed cautiously to ensure that sacrifices of frontline health care workers are honored and respected and that the eventual passing of the pandemic does not result in the amazing efforts of frontline caregivers being forgotten or diminished," added Quinn.
"The corporate leaders of the two largest hospital systems have the burden to demonstrate how all Rhode Islander will benefit and how in particular we can do better by communities of color by improving access to high quality health care, growing good jobs, improving health outcomes and being good neighbors," added Quinn.
Executives of the two hospitals claim that the merger will be a boon to healthcare in Rhode Island, claiming in the announcement, "This will create an integrated academic health system (AHS) that has the full array of complementary medical specialties required for excellence in health care, biomedical research to remain on the leading edge of treatment and therapies, and the collaboration required to enable medical practitioners to effectively and efficiently provide health care to the community. This is a unique and valuable opportunity to bring together the expertise and capacity of three organizations to offer excellent, coordinated care to patients."
SEE BELOW 5 CRITICAL ISSUES
5 Things You Need to Know About the Lifespan - CNE Mega-Merger
Federal Trade Commission
The merger between Lifespan and Care New England is expected to undergo federal regulatory review by the Federal Trade Commission.
Recently, the FTC challenged Hackensack Meridian Health, Inc.’s proposed acquisition of competitor Englewood Healthcare Foundation in New Jersey.
On December 3, 2020, the FTC said the "New Jersey healthcare system merger would increase price and reduce quality of healthcare."
RI's Biggest Corporation
This deal, if allowed to stand after federal review, would create a massive healthcare corporation in Rhode Island -- a company that would be bigger and more influential than anything the state has ever seen.
- Employment 20,000 plus -- nearly 3x larger than the number of employees CVS has in Rhode Island
- Massive bureaucracy
- Top-tier salaries - Lifespan CEO Timothy Babineau now earns approximately $2 million a year in compensation for the non-profit
Concerns About Quality and Costs
A major New York Times found that major healthcare mergers don't improve quality.
"Martin Gaynor, a Carnegie Mellon University economist who is an author of several reviews exploring the consequences of hospital consolidation, said that 'evidence from three decades of hospital mergers does not support the claim that consolidation improves quality.' This is especially true when government constrains prices, as is the case for Medicare in the United States...'When prices are set by the government, hospitals don’t compete on price; they compete on quality,' Mr. Gaynor said. But this doesn’t happen in markets that are highly consolidated," reported the Times.
These findings have been supported by a number of other studies.
Layoffs
The exact employment level pre-merger between the two corporations is estimated at approximately 22,000 employees including their vast array of subsidiaries.
A combined entity is likely to lay off thousands to cut costs and to eliminate duplicate back-end functions such as billing, tech, and support services.
Boston hospital groups have also offshored significant tech functions to cut costs.
Too Big?
The combined healthcare giant will be able to dominate the market place, swallowing up healthcare insurers, physician groups and the unions.
Both healthcare groups have been lobbying forces at the State House -- the combined entity will employ more workers than RI state government. At 20,000 employees, nearly half of all healthcare workers would work for the merged entities.
