One thing Care New England cited when it pulled out of these latest merger talks was a “remarkable turnaround” financially.

There’s some truth to that. A little more than two years ago, Care New England was hemorrhaging money. By the close of the fiscal year ending in June 2017, the company had lost $42 million in just a year’s time. Most of the loss was due to Memorial Hospital in Pawtucket, an aging hospital in a low-income community that was not a money-maker. 

The financial stress was one part of why Care New England struck a deal for a takeover by Partners Healthcare, the Boston-based hospital giant. That deal percolated behind the scenes for two years while Care New England’s finances slowly improved. It closed Memorial at the end of 2017 and ended the following fiscal year with losses of just about $4 million. Compared to $42 million in the red, that is a turnaround.

But according to Cynthia Keller -- an analyst at S&P Global, a ratings agency that tracks Care New England -- the company isn’t “out of the woods” yet. Its bond rating remains a double-B-minus, which is a few categories below average. And just last month S&P downgraded its outlook of Care New England from positive to stable after its deal with Partners fell apart

Those subpar ratings make it difficult for Care New England to get its hands on much-needed capital. Lyndean Brick is president and CEO at Advis. They do hospital consulting. She says access to capital is one of many reasons struggling hospitals around the country have sought out mergers.

“Consumers like shiny, new buildings,” Brick says. “And sometimes consumers make their healthcare decisions based on what the edifice looks like, what the marketing plan says. They want the places they receive care to be modern, new and updated.”

Access to capital was one reason Care New England pursued a deal with Partners. Now that these in-state talks are off, the question naturally becomes: Is the Partners deal back on the table? Fanale says “nothing is imminent,” but still, he says he thinks the prospect of a deal with Partners is “terrific.”