Lifespan hospital group to be renamed Brown Health; school will provide $150M
by: Ted Nesi
PROVIDENCE, R.I. (WPRI) — Rhode Island’s largest hospital group announced Thursday it will change its name to Brown University Health, part of a far-reaching plan to deepen its relationship with the Ivy League school in exchange for a big upfront infusion of cash.
The new set of agreements isn’t a merger, so Brown won’t be taking direct control of Lifespan’s hospitals. But the school has agreed to plow $150 million into the soon-to-be Brown Health system over the next seven years, allowing its cash-starved hospitals to upgrade their operations.
“We are excited to move forward with robust plans to expand our facilities and improve our systems and technology to be able to compete with new entrants to the health delivery market, such as national chains,” Lifespan President and CEO John Fernandez said in a statement.
“The investments from Brown are critical and will help Lifespan address its immediate challenges,” added Fernandez, who was recruited from Mass Eye and Ear in Boston to replace Timothy Babineau as Lifespan’s chief executive in 2022.
Lifespan is a not-for-profit corporation and Rhode Island’s largest employer, with roughly 16,000 workers. It owns Rhode Island, Miriam, Newport and Bradley hospitals, as well as a variety of other medical enterprises. But it has struggled for years to post a meaningful profit margin, which executives have blamed in part on low insurance reimbursement rates in Rhode Island.
Lifespan said while the formal adoption of the name Brown Health should happen later this year, it will take several years to fully complete the rebranding.
For Brown, the biggest upside of the deal appears to be stabilizing a crucial partner for its Warren Alpert Medical School and, university leaders hope, helping the health system compete more effectively against other academic medical centers regionally and nationally. Brown’s investments will help Lifespan fund the expansion of electronic medical records and the recruitment of top-ranked clinicians, executives said.
“The new agreements move the relationship between Brown and Lifespan to a more contemporary model in line with other affiliation agreements we see across the country, where the academic-medical affiliation is reflected through a shared name between the hospital system and the academic institution,” said Brown President Christina Paxson.
Target 12 first revealed the talks between Brown and Lifespan last October. The discussions followed years of turmoil over the future of Rhode Island’s biggest hospital systems, including multiple failed transactions, most recently the proposed Lifespan-Care New England merger that Attorney General Peter Neronha vetoed in 2022.
Lifespan and Brown said they have consulted with both Neronha’s office and the R.I. Department of Health to confirm that their new agreements don’t require regulatory approval, since ownership of the hospitals is not changing.
The decision by Lifespan’s board to switch to a more prestigious brand name echoes a similar move made in 2019 by Massachusetts’ largest hospital group, Partners HealthCare, which opted to rename itself after its two flagship hospitals, becoming Mass General Brigham.
Other universities also lend their names to affiliated academic medical centers that they don’t own, including Yale New Haven Health in Connecticut, the University of Vermont Health Network and California’s UCLA Health. In Rhode Island, the independent provider group Brown Physicians Inc. has a similar relationship with Brown.
Paxson said Brown and Lifespan agree on “the goal of improving the health of families in Rhode Island, both through medical advances in care and state-of-the-art medical training for the next generation of physicians.”
Money is at the center of the new agreements between the two institutions.
Funding will initially flow from Brown to Lifespan, with the school pledging to invest $15 million to $25 million annually in the hospital system for the next seven years, starting next month. After that, the flow of funds will reverse, with Lifespan promising to allocate $15 million a year to Brown’s medical school.
“Solid financial footing is needed now to address facilities and other infrastructure needs across the Lifespan system,” Fernandez said, “and our longer-term support will in turn help to further recruit and retain talented academic and clinical leaders as department chairs for the Warren Alpert Medical School.”
Lifespan also hopes the investments made with Brown’s money will help attract more patients from out of state, bolstering the system’s bottom line.
Separately, the Brown Investment Office — which manages the university’s $6.6 billion endowment — will take over management of $600 million to $800 million of Lifespan’s investments over the next four years. Officials said they hope Brown’s financial team can secure better returns on Lifespan’s portfolio that can be reinvested in the health system.
Brown’s medical school is relatively young in the context of higher education, founded only a half-century ago, in 1972. (An earlier Brown medical school had shut down in 1827.) University leaders have invested significant money in the medical school over the last generation, opening a flagship building in the Jewelry District in 2011.
Yet Paxson has long said the medical school can’t thrive without strong affiliated facilities, and has spent years trying to figure out the best way for the university to support its partner hospitals while protecting its own interests.
At one point, in 2018, Paxson made an aborted effort to buy Care New England, owner of Women & Infants, in partnership with Prospect Medical Holdings. Later, she offered to contribute $125 million toward making the Lifespan-CNE merger a success.
But Lifespan’s Rhode Island Hospital has been the principal teaching hospital for Brown’s medical school since even before it began accepting students, and the agreement announced Thursday reinforces that status. Paxson and the medical school’s dean, Dr. Mukesh Jain, will join the Lifespan board of directors as ex officio members, and Jain will also be appointed as Lifespan’s chief academic officer.
The changes will “strengthen the work we have been doing for several years to integrate research and break down barriers for physicians and scientists who translate discoveries in the lab into treatments benefiting patients,” Paxson said.
Brown said it still plans to maintain its existing teaching affiliations with other local institutions, including Care New England.
Watch the full press conference below:
Ted Nesi (tnesi@wpri.com) is a Target 12 investigative reporter and 12 News politics/business editor. He co-hosts Newsmakers and writes Nesi’s Notes on Saturdays. Connect with him on Twitter, Threads and Facebook.