CharterCare Health Partners, the company that owns Roger Williams Medical Center and Our Lady of Fatima Hospital, has entered into a definitive agreement for a joint venture with a California-based health-care company.
Under the plan, which requires state approval, Prospect Medical Holdings of Los Angeles will become the majority owner of CharterCare, but governance will be shared equally with CharterCare, which will also retain its name and management team.
After months of due diligence, said CharterCare CEO Kenneth H. Belcher, "We have found that this partnership is absolutely the right one for CharterCare."
In recent months in Rhode Island, two hospital mergers have been completed and a third is moving through the regulatory process. But the CharterCare plan is unusual because it's a joint venture rather than a takeover.
Additionally, according to Thomas Reardon, president of Prospect East, Prospect will bring a new model to Rhode Island, one focused on partnerships with physicians, surgical centers, nursing homes, health care centers and other community providers. It is "not hospital-centric," Reardon said. "This is all about getting patients to the right place at the right time at the right cost."
If the deal is approved, upon closing, Prospect will pay off ChaterCare's $34 million in debt and put up $11 million in working capital. Prospect will spend an additional $50 million over the next four years on physician network development, facility improvement
and technology acquisition.
CharterCare and Prospect, a privately held for-profit owned by a capital equity firm, announced their intentions last March. The definitive agreement is another milestone in a months-long process. Next, the Department of Health and the attorney general must approve the change of ownership. The two companies intend to file their application within a couple of weeks and hope complete the transaction by early next year.