News & Press Releases
Feb 2, 2009 — St. Joseph Health Services and Roger Williams Hospital Sign Affiliation Agreement and File Application with State.
(Providence, Rhode Island) -- Trustees of St. Joseph Health Services of Rhode Island (SJHSRI) and Roger Williams Hospital (RWH) have signed a Definitive Agreement to affiliate the organizations under a recently-formed parent holding company to be known as CharterCARE Health Partners.
Yesterday, the institutions filed their application with the Rhode Island Attorney General, the office designated by the Rhode Island Hospital Conversion Act to review and act on hospital affiliation proposals. The Rhode Island Department of Health must also review and approve the application, which totals approximately 22,000 pages of documents and data.
If the application is approved, CharterCARE Health Partners will operate a total of 579 licensed hospital beds, employ approximately 3200 employees and have annual operating revenues of approximately $330 million.
Rationale for the Affiliation
- Community access to health care will be ensured from the collective strength of the two organizations.
- The overlap between SJHSRI-RWH market areas (the hospitals are 2.5 miles apart) will create a strong platform for the integration, consolidation and strengthening of clinical services.
- Significant operating efficiencies in administrative and other overhead costs given the hospitals' close proximity.
- The SJHSRI & RWH combined market share (22% in Greater Providence and approximately 15% of entire State) creates the size and scale required by hospital providers to compete in today's heath care economy.
- The affiliation will create opportunities to develop centers of excellence in several clinical service areas.
Proposed Executive Management
If the application is approved, RWH president Kenneth Belcher will be appointed as president and chief executive officer of CharterCARE. John M. Fogarty, who heads SJHSRI, will become executive vice president and chief operating officer of CharterCARE. Both Belcher and Fogarty will continue in their roles as President and CEO of their respective organizations.
Other executive staff appointments will be made at a later date.
Proposed Governance
RWH will continue its status as a secular, academic organization, while SJHSRI will continue to operate under the sponsorship of the Roman Catholic Diocese of Providence. The affiliation will be structured so as to meet the requirements of Church canonical law governing mergers of Catholic hospitals with secular hospitals.
Governance specifics include:
- Both SJHRI and RWH propose to maintain separate hospital licenses and governing boards, which in turn will be overseen by a 15 member CharterCARE board with oversight of system finances and strategic planning.
- Inaugural board leadership for CharterCARE Health
Partners will have Edwin Santos (current Board chair at RWH) as Chairman. Monsignor Paul Theroux (current Vice Chair of SJHSRI) will serve as Vice Chairman. - CharterCARE will be the parent of all existing RWMC and SJHSRI entities (except the SJHS Foundation). It will have reserved powers in the area of financial/operational oversight, capital allocation, strategic planning, board appointments and approval of bylaws.
- The Bishop of Providence will retain reserved powers in all areas of Catholicity. This includes adherence Ethical & Religious Directives (ERD's) as they may be amended from time to time.
- The inaugural CharterCARE Board will serve for three years and will consist of eight trustees designated by the Bishop and seven designated by the Board of Trustees of Roger Williams Hospital.
Business and Strategic Provisions:
- Operational Control:
As parent, CharterCARE will have operational oversight of hospitals and subsidiaries in the areas of: bylaw approval, trustee appointment, approval of capital/operating budgets & strategic plans, incurrence of debt, sale of property, appointment/removal of officers, approval of future mergers, dissolutions and academic affiliations. - Hospital Boards:
The individual hospital boards will have a more focused role centered on monitoring of patient care quality, credentialing of the medical staff and related responsibilities. - Medical Staff:
The medical staffs of the two hospitals will remain separate but will actively collaborate on clinical service line leadership, quality management and new service development. - Endowments/Gifts:
Previous and future gifts to RWH or SJHSRI will remain assets under their respective control. Both hospitals will continue distinct fundraising post-affiliation.
Bishop Thomas J. Tobin, Chairman of the SJHSRI Board of Trustees stated, "Approval of our application will be a milestone in the development of stronger, community-based hospital care in Rhode Island, while at the same time maintaining our Catholicity and spiritual dimension and our unique mission and ministry to the underserved."
"This is an important step as our two organizations consider an affiliation that reduces costs, improves service, and increases access to care for the community," said Edwin J. Santos, Chairman of the RWH Board of Trustees. "Our continued discussions will focus on how to best build an integrated healthcare system that is beneficial to the community, our employees, and the two institutions."