CharterCare Health Partners, Prospect Medical Holdings Finalize Partnership

CharterCare Health Partners, a nonprofit health system, has announced a partnership with Santa Ana, Calif.-based for-profit Prospect Medical Holdings, which took effect June 20.

CharterCare operates 220-bed Roger Williams Medical Center in Providence, R.I., and St. Joseph Health Services in North Providence, which includes 359-bed Our Lady of Fatima Hospital. Prospect is supported by Los Angeles-based private equity firm Leonard Green & Partners.

The organizations signed a letter of intent in March, and the Rhode Island Department of Health and Attorney General Peter Kilmartin approved the joint venture between the two organizations in May.

"We are thrilled to begin our joint partnership in Rhode Island," said Thomas Reardon, president of Prospect, in a news release. "Our goal is to provide Rhode Islanders with the healthcare they need at the right time, in the right place, compassionately and efficiently."

Under the deal, a new limited liability company will be created: Prospect CharterCare. Prospect will own 85 percent of the entity, with CharterCare owning the remaining 15 percent.

Prospect is paying $45 million for its 85 percent interest, which will go toward extinguishing the system's debt and increasing the pension funded status. Over the next four years, Prospect will also invest $95 million into CharterCare's hospitals.

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