LifeSpan, Care New England merger could have significant positive economic impact

Photo: Martin Barraud/Getty Images

As Brown University and Rhode Island’s two largest nonprofit healthcare systems continue working toward an integrated academic health system, an independent analysis commissioned by Brown concludes that closer integration of health systems, physician practices and research can create significant economic and societal gains to communities throughout Rhode Island.

The analysis, released by consulting firm Tripp Umbach, found that the proposed merger of the Lifespan and Care New England health systems could increase the economic impact of academic medicine from $8.2 billion in 2020 to $11.5 billion by 2035, a net $3.3 billion increase.

Brown and the health systems signed agreements in February 2021 to create an integrated academic health system, with Brown committing to provide a minimum of $125 million over five years in support of its development.

The release of the report comes as applications for the merger of Lifespan and Care New England are under review with federal regulatory agencies and the Rhode Island Attorney General, with opinions expected to be rendered no later than March 2022. 

While Brown is not a direct party to the merger, the proposed system would bring together numerous teaching hospitals – Lifespan’s Rhode Island, Miriam, Hasbro and Bradley hospitals, and Care New England’s Women and Infants, Kent and Butler hospitals – with Brown and its research and medical education from the Warren Alpert Medical School.

The evaluation found that Rhode Island lags peer states in the size of the academic medicine industry, defined by total economic impact of higher education, healthcare and the biomedical industry. Even without the benefits of a fully integrated academic medical center, Brown’s medical, public health and biomedical engineering programs compare favorably in economic impact to medical schools in peer markets.

Lack of integration with Brown and the affiliated teaching hospitals in the two health systems restricts economic development in Rhode Island, the report found, as the teaching hospitals produce lower-than-average economic impact compared with peers in Connecticut, Massachusetts and New York.

WHAT’S THE IMPACT

Among the other findings are that creating an integrated academic medical center can significantly increase biomedical economic development in Rhode Island and create approximately 10,000 new high-paying jobs by 2035.

Through closer collaboration with payers, including the state government, an integrated academic health center can focus resources in medicine and public health on developing ways to prevent costly diseases by reducing smoking, obesity, substance abuse, exposure to environmental toxins and more, the report also found.

And according to the report, the majority of high-paying jobs arising from the increase in economic development will be in the private sector. These will result from growth in the biomedical industry from research commercialization.

Beyond the economic benefits, leaders at the University and Care New England and Lifespan say the system would offer a full array of complementary medical specialties, reduce care disparities and build on Brown’s research and medical education programs. Brown would participate on the governing board of the newly merged health system and play a key role in integrating medical education and research with clinical practice across the combined system’s hospitals.

THE LARGER TREND

When a merger or acquisition occurs in healthcare, the conjoining providers often say that patient experience will benefit as a result. But findings published in the New England Journal of Medicine in January 2020 suggests that may not be the case.

In fact, the study found just the opposite: Acquired hospitals actually saw a patient experience that was moderately worse, on average. What’s more, 30-day mortality and readmission rates stayed largely the same at such facilities.

The only real improvement that was found among the majority of acquired entities was in the realm of clinical process, which improved modestly. But the improvement was so incremental that it couldn’t be linked to the actual acquisition, and prices for commercially insured patients tended to be higher.

The findings mirror research published in February 2019 finding mergers and acquisitions may negatively impact patient satisfaction and the perception of their care.

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