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L&M, Westerly Hospitals Explore Possible Alliance

Hospitals enter non-binding letter of intent to look into strategic relationship such as a merger or alliance

has started discussions with a Rhode Island hospital to determine whether the two health care providers should enter into a strategic alliance.

Michael O’Farrell, director of public relations for Lawrence & Memorial, said the boards of directors and administrations of the two hospitals started discussions about two months ago. He said they announced the signing of a non-binding letter of agreement Wednesday to explore a possible relationship such as a merger of affiliation.

O’Farrell said the details of such a relationship are still under discussion. He said the hospitals will first determine whether such an alliance is feasible and beneficial for both sites and determine the nature of the relationship later if the hospitals decide to enter a formal agreement.

“Basically both organizations are looking at what the structure could be, is there an opportunity for alignment, and what has to take place for that to happen,” he said.

Lawrence & Memorial has a main 280-bed hospital on Montauk Ave. in New London, although a sleep center, occupational health services, and outpatient facilities exist at several other areas. Overall, the hospital has three locations in Groton, two locations each in East Lyme and Waterford, and one location each in Mystic, Old Saybrook, and Pawcatuck, according to the hospital’s website.

According to its website, the Westerly Hospital is a 125-bed facility affiliated with Mystic Medical Center in Mystic and Wood River Health Services in Hope Valley, R.I. O’Farrell said the discussions are taking into account the fact that the hospitals have overlapping service areas. Lawrence & Memorial cares for patients from eastern Connecticut, western Rhode Island, and Fishers Island, N.Y. Westerly Hospital serves patients from New London County and Washington County in Rhode Island.

“If you look at the geography, we’re probably 15 to 20 miles apart,” he said.

The leaders of the two hospitals said in a press release that the goal of the hospitals is to align their respective missions and improve the quality of health care for patients in the region. Bruce D. Cummings, president and chief executive officer of Lawrence & Memorial, said the hospitals are also looking to improve their organizational models and lower costs.

“We have an obligation to our patients, our employees and our communities to explore opportunities that have the potential to enhance ourselves clinically, operationally and financially,” Cummings said. “I believe an alliance with Westerly may well be one of those rare opportunities whereby two organizations and the communities they serve can all benefit by coming together.”

“Strategically, The Westerly Hospital has been evaluating its role within the evolving healthcare landscape and has been looking for a partner to align with for approximately four years,” said Charles S. Kinney, president and chief executive officer of The Westerly Hospital. “The time to look for a strategic partner is when you are in a position of strength and can bring value to a new organization.”

The letter of intent officially starts a due diligence process between the two hospitals, but doesn’t signify a formal agreement between them. O’Farrell said it will take at least four more months of discussion for the hospitals to determine whether to enter an agreement, and that any agreement would be followed by a further review by regulatory authorities at the federal and state level.

“The key thing here is that nothing has been determined in terms of assuming this moves forward in the next stages after the due diligence process,” he said.

Susan September 01, 2011 at 01:20 AM
Westerly is a warm and welcoming place, L & M - not so much - it will be a shame if the "strategic partnership" harms Westerly instead of improving L & M

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