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WOONSOCKET -- Mayor Leo Fontaine announced Friday that Gov. Lincoln Chafee has assured him that he will not veto legislative changes to the Hospital Conversions Act sought by Landmark Medical Center's prospective buyer, Steward Health Care of Boston.
Fontaine said he met with Gov. Lincoln Chafee on Thursday and told him that hospital officials were convinced the veto would kill the deal and hasten the demise of the struggling community hospital.
"I am very pleased that the Governor will not veto this legislation that is so critical to saving the hospital," Fontaine said in a statement released at 6:44 a.m. today. "We all understand that the closure of Landmark would have been devastating to our community in many ways."
Gov. Chafee disclosed earlier this week that he was seriously considering vetoing the bill, which would have allowed Steward to buy another hospital after acquiring Landmark without waiting three years, as the current law requires. The amended HCA would have also shortened the regulatory review period governing hospital mergers from 180 to 120 days, and given applicants for hospital mergers more power to
challenge regulatory decisions in court.
With many of the state's community hospitals facing challenges similar to Landmark, Chafee said he was concerned the new HCA would weaken the regulatory system a time when an aggressive one is most needed.
Landmark employs some 1,200 people at the Cass Avenue acute care facility and its affiliate, the Rehabilitation Hospital of Rhode Island in North Smithfield. Both are part of the Steward deal.
As Woonsocket has struggled to climb out of a fiscal hole brought on by deficits in the Woonsocket Education Department, Fontaine said, "the closure of Landmark would have been a tremendous blow as the hospital is the second largest employer in the city. Additionally, the planned sale to Steward has been viewed as an economic opportunity for the city, considering the millions of dollars in investment which has been pledged by Steward as well as the propety tax revenue that will be realized as a result of the sale to a for-profit entity."
Fontaine said the passage of the legislation now paves the way for the completion of the sale. The city also hopes Steward's investment will serve as a catalyst for further economic investment in health care in a new "medical overlay district" near the hospital.
Fontaine praised the "tireless and consistent efforts of State Sen. Roger Picard in supporting the HCA amendments, which were sought by Steward as a condition of purchasing Landmark.
Landmark filed for receivership in June 2008, saying it was on the brink of insolvency. Thus ensued a search for a "strategic acquisition" with a sound health care entity willing to take over the hospital. That search culminated in May 2011 when Pawtucket lawyer Jonathan Savage, the court-appointed trustee, recommended Steward as the most qualified buyer.
In existence for less than two years, Steward quickly acquired 11 hospitals in Massachusetts after it was formed with backing from the New York-based Cerberus Capital Management Group.
"I want to thank Gov. Chafee for recognizing the importance of our community hospital to the people of our city and to its many employees," Fontaine said.
"Though the Governor voiced some concerns he has about the legislatin, he has remained to to his commitment to a quality, full-service hospital in our city, and for that I am grateful."
Fontaine said he informed Savage and Hospital Prsident Richard Charest of governor's decision after leaving the meeting with Chafee on Thursday. They, too, were relieved and gratified by the news, he said.