Talks between the two providers -- as well as Brown University -- are expected to continue throughout the summer.
The question of how a Lifespan-Care New England merger could change healthcare in Rhode Island has a lot to do with competition. That is, what patients could lose or gain if the state’s two largest hospital chains decide to team up, rather than compete.
Michael Fine, who used to run Rhode Island’s department of health, says one merged entity would enjoy a larger pool of patients seeking specialty care. That could mean doctors get more practice and provide better care.
“The more you do something the better you get at it,” Fine says. “You’d rather have one group doing lots of it than groups doing some of it.”
But one merged entity would also control a huge proportion of Rhode Island’s hospital market. Right now, seven out of every ten hospital beds in the state are at either a Lifespan or a Care New England hospital.
Harvard Business School professor Leemore Dafny says hospital mergers of rivals have not yielded benefits for consumers -- at least not any way that research can measure. Dafny says mergers like this increase prices on average, and there’s no compelling evidence that hospital mergers improve the quality of care.
“That would lead an academic to say what your governor is proposing to do is unconventional to say the least,” Dafny says, “and history would not be favorable to the approach.”
Still, the two providers and the state might find a merger worth it because it would let Rhode Island maintain local control over its hospitals -- at least for the time being. The alternative to creating one large local provider might be one large out-of-state provider entering Rhode Island’s hospital market. These talks began after Rhode Island Governor Gina Raimondo called on the two providers to return to the bargaining table, halting a proposed deal between Care New England and Boston-based Partners Healthcare.
Chris Koller used to be Rhode Island’s health insurance commissioner. Koller says that even though the Partners deal has fallen apart for now, the specter of large out-of-state providers still looms over these new talks.
“Hospital consolidation will not stop,” Koller says. “Folks from Boston, folks from New Haven will continue to look this way. If we don’t do this, what’s the likelihood that Rhode Island will become a branch operation for New Haven or for Boston?”
The talks are expected to continue throughout the summer.