PROVIDENCE — Lifespan, Rhode Island’s largest health care system, will change its name to Brown University Health later this year as part of an expanded affiliation agreement that will come with millions of dollars in university-backed investments.
The rebranding will take place over the next several months, according to executives at both institutions. The agreement, which was recently finalized after months of conversations between Lifespan’s and Brown’s highest ranking individuals and attorneys, also includes a $15 million to $25 million annual investment by the university in the health system, totaling as much as $150 million over seven years.
The investment from Brown is intended to strengthen Lifespan’s financial capacity to “sustain and advance the shared academic mission of the organizations,” according to a news release obtained by the Globe ahead of Thursday’s announcement.
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Lifespan will also invest $15 million annually to support Brown’s Warren Alpert Medical School’s education and research efforts. And the Brown Investment Office will gradually take on the management of approximately $600 million to $800 million of Lifespan’s investment portfolio.
The two institutions have been affiliated since 1969, but the rebranding and additional investment comes as the health care industry is struggling. Coming out of the COVID-19 pandemic, hospitals across the US have been plagued by physician and nursing shortages, increased supply and operating costs, and low reimbursement rates.
Around New England, there’s another layer of pressures facing hospital owners, employees, and their patients: Steward Health Care filed for bankruptcy in May and is selling off all 31 of the hospitals it owns across the country, including eight in Massachusetts. (Lifespan is eyeing some of them). In Rhode Island, Prospect Medical Holdings was ordered by a judge this month to pay $17 million in unpaid bills within 10 days — a demand Prospect’s lawyers threaten will shutter the two R.I. hospitals they own, Roger Williams Health Center and Our Lady of Fatima Hospital, for good.
Lifespan CEO John Fernandez, who previously led Mass Eye and Ear in Boston while it was being acquired and expanded by Mass General Brigham, said the institutions’ new agreement will help expand facilities and improve systems so they can better compete with “new entrants to the health delivery market,” such as national chains.
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“Solid financial footing is needed now to address facilities and other infrastructure needs across the Lifespan system, 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,” said Fernandez, who previously told the Globe that he views Uber, CVS, Amazon, and other tech companies as some of his most challenging competitors.
Lifespan owns and operates five hospitals: Rhode Island Hospital, which is the state’s only Level 1 trauma center; The Miriam Hospital; Bradley Hospital; Hasbro Children’s Hospital; and Newport Hospital.
While the investments from Brown will be critical in helping Lifespan address immediate challenges, the health system will “still need to continuously improve its operations while expanding and diversifying its revenue opportunities and work toward creating a more balanced reimbursement structure on par with those of neighboring states,” said Fernandez.
Brown University president Christina H. Paxson said the college’s investments promise to accelerate improvements to the health system, including the expansion of electronic health records and the recruitment of talented academic and clinical leaders as care providers and department chairs for the medical school.
Dr. Mukesh K. Jain, the dean of Brown’s medical school, will serve as Lifespan’s chief academic officer. Paxson and Jain will also become ex officio members of Lifespan’s board of directors.
Paxson was involved in Lifespan’s most-recent attempt to merge with Care New England, the second largest health care system in Rhode Island. The two health care systems had attempted and failed to merge previously, but tried again in 2020 with Brown University as part of the proposed partnership. That proposed merger was eventually rejected by state and federal regulators, who determined it would hurt consumers by creating a health care giant with a stranglehold on the local market.
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In this new agreement, Lifespan and Brown will remain separate and independent, according to Lifespan executives and university officials. The 20-year agreement 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 benefitting patients,” said Paxson.
Rhode Island Attorney General Peter F. Neronha’s office, which was among the regulatory bodies that denied the proposed merger between Lifespan and Care New England, determined that the new agreement between Brown and Lifespan did not necessitate a review under the Hospital Conversions Act or antitrust authorities, said Neronha spokesman Brian Hodge. The office declined to comment further.
Lifespan will continue to be affiliated with other educational institutions — including the University of Rhode Island, Rhode Island College, and the Community College of Rhode Island — “for clinical education programs not currently offered at Brown.” It’s unclear if Lifespan will be able to separately affiliate with other institutions in programs that Brown already offers or plans to offer in the future.
The Warren Alpert Medical School will also be the “exclusive medical school affiliate of Lifespan,” according to a news release.
“We are sustaining efforts to capitalize on each organization’s existing strengths, strategically build research capacity, coordinate effectively with other local institutions, and create new partnerships that benefit the people and economies of Rhode Island,” said Paxson.
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Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her @alexagagosz and on Instagram @AlexaGagosz.