PROVIDENCE —The state’s attorney general, as well as its health director have given their blessings to a joint venture involving CharterCare Health Partners — owners of Fatima Hospital and St. Joseph’s, along with Roger Williams Hospital — and Prospect Medical Holdings of Los Angeles, Calif.
In March 2013, CharterCare Health Partners executed a Letter-of-Intent with Prospect, a for-profit health care corporation that operates several hospitals, physician networks, medical groups, primary care clinics and outpatient centers in Texas and California, to engage in a joint venture which would make the Rhode Island facilities for-profit entities. Prospect would become the majority owner of CharterCare, which would share equal management duties and responsibilities with Prospect in the operations of the facilities, and would also appoint 50 percent of the board members of the new company in order to maintain a strong local presence, according to CharterCare, which operates a total of 579 licensed beds, employs 3,000 staff members, and has annual operating revenues of approximately $300 million.
On October 18, 2013, CharterCare and Prospect jointly filed an application for the business venture with Rhode Island’s Department of Health and the Attorney General’s office.
In a joint statement, CharterCare and Prospect said they were gratified by the decisions of Attorney General Peter F. Kilmartin and Department of Health Director Michael Fine, M.D., to grant final approval to the proposed joint venture, as well as to the Health Services Council, which voted unanimously to recommend approval of the joint venture on May 13.
“Through our unique and innovative partnership, we look forward to building on the tradition of high-quality, compassionate care at Roger Williams Medical Center and Our Lady of Fatima Hospital and preserving both institutions, as well as Elmhurst Extended Care and the St. Joseph Health Center clinics, as vital components of the Rhode Island health care network,” the companies said.
Officials from both Fatima and St. Joseph’s hospitals have said that Prospect would observe the Catholic identity of the medical facilities should the proposed joint venture be approved.
“Our new partners have committed to the Catholicity of the organization,” Pat Nadle, chief nursing officer for Fatima Hospital, said in a previous interview with Rhode Island Catholic.
Dr. Joseph Samartano, a member of the Board of Directors of the St. Joseph Center for Health and Human Service has expressed his support for the venture, which would allow for the infusion of new revenue into the health center in Providence, enabling the facility to expand its service offerings.
“Their commitment to the Catholicity of St. Joseph’s is important,” he said of the venture with Prospect.
The CharterCare board and management team decided to seek a partnership in order to better position the company to better meet the needs of a changing health care landscape.
Prospect has committed to providing CharterCare with a total of $95 million in working capital over the next four years, with $45 million to be provided upon regulatory approval, to be used for debt reduction and short-term operations expenses. An additional $50 million would be provided over the subsequent four-year period to provide capital for a physician development network, facility improvement and technology acquisition.
While the attorney general and health director have approved the joint venture between the companies, a similar merger document has been submitted to the Vatican seeking its approval of the deal as well.
