News Summary
Rhode Island’s acquisition of Roger Williams Medical Center and Our Lady of Fatima Hospital by Centurion Foundation faces hurdles. The new owners have not secured necessary bonds and must navigate bankruptcy proceedings. With a deadline looming, state officials are concerned about the implications for local healthcare services. The hospitals cater to over 50,000 emergency visits annually, making their future pivotal for healthcare access in the region.
Rhode Island is facing uncertainty surrounding the potential purchase of two crucial hospitals, Roger Williams Medical Center and Our Lady of Fatima Hospital, by the Georgia-based nonprofit, the Centurion Foundation. This acquisition is complicated by the fact that Prospect Medical Holdings, the current owner, is undergoing bankruptcy proceedings and is trying to divest its Rhode Island facilities.
The Rhode Island Attorney General, Peter F. Neronha, has reported that Centurion has not yet secured the necessary $165 million in bonds for the purchase. The deadline for this financing was originally set for May. As the clock ticks, Neronha has warned that if the sale does not conclude by the end of October, the agreement may collapse entirely.
Neronha has shown flexibility regarding the financial requirements tied to the sale; he has eased the cash reserves Centurion must hold three times in the past 15 months—from $80 million down to $45 million, and eventually to $36 million. Furthermore, Centurion was initially required to secure up to $35 million within 90 days of closing the deal; however, they have since requested that this stipulation be waived.
Despite these challenges, Otis Brown, a spokesperson for Centurion, insists that the acquisition remains on track. He cites significant progress in financing, thanks in part to the relaxed conditions implemented by Neronha. However, the Rhode Island state government has made it clear that it will not provide any financial assistance for this deal.
The original sale agreement was designed with stringent conditions meant to protect patients, workers, and taxpayers from the for-profit motives associated with Prospect’s ownership. This focus on protection becomes even more significant given that Prospect has attempted to sell these hospitals since filing for bankruptcy in January 2022.
Another layer of complexity arises from the fact that Centurion has no prior experience in owning or operating hospitals. This has raised concerns among union leaders regarding the foundation’s business model and its reliance on debt financing. Some, like union leader Lynn Blais, argue that a business model based on heavy debt is unsustainable for managing hospital operations.
If the sale does not occur, Roger Williams Medical Center and Our Lady of Fatima Hospital will remain under the jurisdiction of a bankruptcy court in Texas. This situation could force the hospitals to seek alternative buyers, which may complicate their future operations and stability.
These hospitals play a vital role in the healthcare infrastructure of Rhode Island, accommodating over 50,000 emergency visits annually. Closure of either facility could severely impact patient care and access to medical services in the region.
Currently, ongoing discussions are taking place among state leaders and hospital officials to explore potential funding solutions to facilitate the sale. However, the financial rating agency S&P Global has assigned a BB- rating to the bonds associated with the sale, indicating a high risk due to uncertainties surrounding Centurion’s financial and operational capabilities.
Neronha has publicly communicated his intent to prevent Prospect from closing the hospitals and has expressed his support for providing Centurion the opportunity to complete the acquisition. Nonetheless, municipal leaders from Providence and North Providence are expressing concerns about the financial arrangements that the new owners may implement, fearing the possibility of losses for local governments.
The two hospitals collectively provide 500 beds, including 104 designated for behavioral health, covering more than 20% of the state’s behavioral health bed capacity. As discussions continue, the fate of these essential healthcare facilities remains precarious, with time running out for Centurion to secure its financing.
Deeper Dive: News & Info About This Topic
- Providence Journal: Roger Williams and Our Lady of Fatima Hospital Sales Moving Forward
- Freep: Ascension Name Exits Michigan with Sale of Borgess Hospitals
- Rhode Island Current: Sale of Roger Williams and Fatima Hospitals Inches Closer
- Alaska’s News Source: Providence to Sell Assisted Living and Skilled Nursing Facilities
- GoLocalProv: Fate of Roger Williams and Fatima Hospitals Tied to Sale of $140 Million
- Wikipedia: Hospital
- Google Search: Hospital Acquisition
- Google Scholar: Hospital Financial Management
- Encyclopedia Britannica: Hospital
- Google News: Hospital Sale
Author: STAFF HERE PROVIDENCE WRITER
PROVIDENCE STAFF WRITER The PROVIDENCE STAFF WRITER represents the experienced team at HEREProvidence.com, your go-to source for actionable local news and information in Providence, Providence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as WaterFire, Rhode Island International Film Festival, and Rhode Island Comic Con. Our coverage extends to key organizations like the Greater Providence Chamber of Commerce and Providence Warwick Convention & Visitors Bureau, plus leading businesses in finance and manufacturing that power the local economy such as Citizens Financial Group and Textron. As part of the broader HERE network, we provide comprehensive, credible insights into Rhode Island's dynamic landscape.
