A potential deal for Partners HealthCare to acquire Care New England (CNE)—Rhode Island's second-largest health system—has been put on ice.
The deal was stymied following a request by Rhode Island's governor that the health systems continue to explore efforts to create a "unified, local system" with state-based institutions Brown University and Lifespan.
"While I have little control over private hospital systems, I do have the ability to bring these parties together and ask them to reconvene negotiations on a crucial decision that will impact all Rhode Islanders for decades," said Governor Gina Raimondo in a statement. "Partners is one of the best medical systems in the country, and we appreciate their interest in Rhode Island."
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Partners originally announced plans to acquire CNE in the spring of 2017. In 2018, Brown revealed it was working with Prospect Medical Holdings, a for-profit California health system, to put in its own bid.
Doing so, the university said at the time, would keep services and doctors in-state instead of potentially shifting them to Boston, where Partners is headquartered.
CNE chose to move forward instead with Partners, entering into a definitive agreement with the Massachusetts system just weeks after Brown’s plans were announced. Lifespan, the largest system in Rhode Island, was also in negotiations to join the merger with CNE but pulled out of the deal in September 2018.
"We appreciate the Governor's dedication and commitment, and respect the importance of a possible Rhode Island Solution involving CNE, Lifespan, and Brown University. To that end, we have agreed to further explore the feasibility of this option and will begin discussions in earnest immediately because it is simply too important for Rhode Island's future," said CNE's president and CEO James Fanale, M.D., in a statement.
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Interim President and CEO of Partners HealthCare Anne Klibanski, M.D., said the health system respected the governor's efforts.
"We look forward to reengaging at the appropriate time—especially with a fully integrated local system," she said. "We greatly value our relationship in Rhode Island and want to do what's best for the state and its citizens."
It's another blow for a Partners consolidation bid.
In November, Partners and Harvard Pilgrim Health Care tabled their merger discussions but said the two would continue to explore “opportunities for collaboration.” Though they had yet to enter into a formal agreement for a merger, the possible deal faced skepticism from Massachusetts Gov. Charlie Baker—who is a former CEO of Harvard Pilgrim—and Attorney General Maura Healey.