Lifespan, Care New England ink deal to create academic medical system with Brown University

Dive Brief:

  • Lifespan and Care New England have signed a definitive agreement to merge the two Rhode Island health systems in a deal that will create an integrated academic health system with Brown University’s medical school. 
  • Brown University is committing $125 million over five years to the creation of the system. The university will have a seat on the governing board of the merged entity. Both systems have close ties to Brown’s medical school. 
  • Financial terms of the deal were not disclosed. The agreement comes about five months after the two signed a letter of intent.

Dive Insight:

The coronavirus pandemic spurred renewed talks of the systems combining last summer. The two had attempted prior deals together but they always fell through. 

Executives of Lifespan and Care New England touted the deal as a way to create the state’s first integrated academic health system.

In a video message with all four leaders, Lifespan CEO Timothy Babineau said the health systems, along with Brown, worked together in ways they had not prior to the pandemic. 

“I think if the COVID pandemic taught us one thing, it is that we are better when we work together,” Babineau said. 

Leaders said the merged system will create a strong learning environment for practitioners and yield expanded research opportunities and spark economic development in the state.  

The executives compared Rhode Island to other states with academic health systems and seemed to imply that Rhode Island trails other states in this area.  

“Rhode Island is one of the only states in the country that does not have a single integrated academic health care system. Massachusets has four or five, Rhode Island has none,” Babineau said. 

Still, research has shown that hospital consolidation tends to lead to higher costs. 

However, Lifespan, the state’s largest health system, and Care New England, said they are not direct competitors. “With a few exceptions” they do not compete among clinical services but provide “complementary” services, according to details posted online.

State regulators will need to clear the deal. The merged group said it will “commit” to rate cap boundaries set by state regulators for at least three years following the merger.