Lynch warns health care companies

By John O'Brien | Jul 30, 2007

PROVIDENCE, R.I. - Two health care giants in Rhode Island received a reminder Friday that their proposed merger is anything but a done deal.

Rhode Island Attorney General Patrick Lynch issued a statement that warns Lifespan and Care New England against overzealousness.

"(A)lthough I understand why Lifespan and Care New England are excited about their proposal, I would remind them that we've been down this road before," Lynch said. "A winning vote in the corporate boardroom doesn't mean the merger has been approved."

The two companies already make up nearly three-quarters of the state's hospital system, and Lynch said he will focus on the antitrust and charitable trust implications of the merger.

Both companies are non-profit organizations based in Providence, and in 1998 they voted to merge. However, then-Attorney General Sheldon Whitehouse would not approve the deal because he wanted more regulatory responsibility.

The companies responded, saying such a deal would harm their ability to compete. Eventually, they gave up.

The deal is back on, for now.

"Hospitals can benefit when they are part of a system," said George Vecchione, Lifespan's president and chief executive, according to a report by The Associated Press. "Now is the right time to embark on a merger."

Lynch says he must protect the consumers' interest in the matter.

"I want to assure Rhode Islanders who rely on the health-care services provided by Lifespan's and Care New England's member hospitals that as much as I recognize how important these institutions are to our economy and overall quality of life, they are not as important as the people they serve," Lynch said.

"We have a long, long process in front of us with literally dozens of complexities to consider."

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