Projo Biz Blog

A deal to sell the Rehabilitation Hospital of Rhode Island in North Smithfield fell through yesterday as the Missouri company that wanted to buy a majority stake in the health-care facility pulled out of the transaction, according to state and hospital officials.

RehabCare Group Inc., of St. Louis, in September 2007 had agreed to pay $1.8 million to Landmark Health Systems Inc., the parent of the rehabilitation hospital, for an 81-percent the share of the North Smithfield facility.

RehabCare (RHB:NYSE) informed the state Department of Health of its decision in a letter sent to the agency yesterday afternoon, according to health department spokeswoman Annemarie Beardsworth, just as the health department had decided that the company's application to take a controlling stake in the rehabilitation hospital could move forward.

Under state law, the health department and the attorney general's office must approve ownership changes at the state's health-care facilities.

"As I've said all along, what's most important is helping Landmark survive and, if at all possible, put itself on a path to profitability so that it can continue to serve the people of northern Rhode Island," said Attorney General Patrick C. Lynch. "Obviously, the Rehabilitation Hospital of Rhode Island is one of Landmark's key assets because it offers comprehensive and highly specialized services. We were ready to proceed with our review of this proposed sale and we will be ready to act if any party makes a similar proposal."

The company's decision follows closely on a vote by the rehabilitation hospital's unionized nurses and therapists authorizing a strike. In meetings Wednesday, the workers approved the tactic as a way to protest changes RehabCare wanted to make in their health-care benefits.

The workers, about 60 in all, have been working without a contract since June 30, when a three-year contract lapsed.

Contract negotiations stopped that month when a state Superior Court judge named a Pawtucket lawyer to oversee Landmark Medical Center's operation. The hospital had petitioned Superior Court in mid-June to clear the way for Landmark's potential merger with another hospital. In his role as overseer, Savage is functioning as the hospital's president, chief executive officer and chairman of the board, ruling on all expenditures, hiring and other decisions.

Judge Michael A. Silverstein last month also formally appointed the lawyer, Jonathan Savage, of Shechtman, Halperin Savage, as overseer of the Landmark subsidiary that runs Rehabilitation Hospital of Rhode Island.

 Tags  health-care workers Landmark North Smithfield RehabCare Rehabilitation Hospital of Rhode Island

Comments

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Link | December 25, 2008 5:38 PM
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Rehabilitasyon said:

Very nice work. Thanks...

Link | January 1, 2009 9:08 PM
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