Lifespan, Care New England cancels merger

New England health care system Lifespan and Care has abandoned its merger plans amid opposition from the federal and state governments, the nonprofit health systems said Wednesday.

Federal Trade Commission and Rhode Island Attorney General’s Office sued for blocking deal last week, arguing that it would raise prices, lower quality and stifle wages. Lifespan and Care New England chose not to appeal or apply a legislative workaround, such as a public benefit certificate.

“Organizations continue to believe that the combination of these systems will significantly improve clinical, academic and research challenges, reduce costs, and improve the patient care environment,” Health Systems said in a press release. which are legally appropriate and enable them to best serve the needs of the community.”

They withdrew their application for passage of the Hospital Talk Law from the Rhode Island Department of Health and terminated their definitive agreement.

Lifespan and CNE are the two largest service providers in Rhode Island. Together they would control most of the state’s general inpatient care, outpatient surgery, and inpatient behavioral medicine. The unified health care system will still have a dominant market share after it loops into nearby 19 Massachusetts cities, as regulators have set.

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If these systems were combined, insurers would be forced to accept higher prices for lower quality of service, the FTC and State AG concluded. According to the complaint, Lifespan and CNE compete on rates offered to commercial insurers and seek to improve service quality by responding directly to each other. Research shows that healthcare workers’ salaries can also stay the same under a dominant employer.

According to regulators, the expected performance associated with the merger does not offset the anticompetitive impact.

The Lifespan-CNE deal is the latest in a series of failed mergers. Mergers and acquisitions experts say CNE, which has operated on low or negative margins for years, is likely to try to merge with another organization or go into a more informal venture.

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