Fernandez, 59, in an interview, said he has no specific strategy for Massachusetts, but spoke of a broad patient-centered vision for BrownHealth. “I want patients to leave, after they come to one of our hospitals, [and] say, ‘Wow, what a great experience I had, what great care I got,’” said Fernandez. “If we do that right, then a whole lot of other things fall into place. That’s true whether we’re in Massachusetts or Rhode Island.” The system was previously called Lifespan Health but rebranded on Oct. 15 to reflect its affiliation with Brown University’s medical school. It has five hospitals in Rhode Island and posted an operating profit of $8.6 million for last year. It is on track for positive earnings in 2024. To the 1,600 employees at St. Anne’s and 1,150 at Morton, Fernandez promised to “focus on GSD — get stuff done.” And there is plenty to do: paying staff and vendors, rebuilding supply chains, and integrating BrownHealth’s electronic record and back-office management systems at its new Massachusetts hospitals. “It took a village to make all this come true,” said Fernandez, recalling months of tense negotiations with Steward, its lenders and creditors, and the owners of the hospital properties. While bankrupt Steward long resisted state efforts to disclose the finances of its hospitals, there’s little doubt that St. Anne’s and Morton, like all Steward hospitals, were neglected and have long-term capital needs. Both are vital to their communities, logging more than 43,000 emergency room visits last year. All told, the state-brokered sales deals inked last summer saved about 13,000 jobs at six former Steward facilities, which include two Holy Family hospitals in the Merrimack Valley , St. Elizabeth’s in Boston and Good Samaritan in Brockton , and St. Anne’s and Morton in the textile mill cities along Route 24. Two others, Carney Hospital and Nashoba Valley Medical Center, were closed after Steward said it could not find qualified buyers. Part of BrownHealth’s financial stability stems from its customer base. It serves a larger share of patients with higher-paying commercial insurance than the other buyers of Steward’s hospitals, which are more reliant on poorer patients insured by MassHealth or Medicare. Just a month after its Massachusetts debut, there’s already speculation BrownHealth may expand further in the Bay State. Norwood officials have asked BrownHealth to reopen Steward’s former hospital in the town , which closed in 2020 after a flood. But for now, Fernandez said he’s focused on making St. Anne’s and Morton operate efficiently within his system. Local officials in Southeastern Massachusetts are relieved at BrownHealth’s arrival, after months of anxiety over the fate of hospitals that have long treated patients and employed residents in a part of the state closer to Providence than Boston. ““We’ve been holding our breath,” said Fall River Mayor Paul Coogan. “Closing [St. Anne’s] would have left a hole right through the middle of the city.” One downside: BrownHealth, as a nonprofit, won’t pay property taxes on St. Anne’s and Morton. That means Fall River will have to make up more than $1 million a year, though Coogan said he’s hoping the new owner can contribute funding for ambulances or other services. For state officials, the cross-border foray by BrownHealth had another advantage, said John McDonough, a professor at the Harvard School of Public Health. It was a way of saving the two facilities without having to turn to giant Boston hospital systems that were more likely to drive up health costs in the region. BrownHealth, with its strong regional reputation, was a known quantity, McDonough said. “It’s healthy to create a more diversified hospital base in Massachusetts without having to bulk up Mass General Brigham or Beth Israel Lahey,” he said. Fernandez, who took the top job at the Rhode Island system on Feb. 1, 2023, has deep roots in Massachusetts health care. He was president of Mass Eye and Ear from 2007 to 2022, and before that spent 15 years as a Brigham and Women’s Hospital executive. In his current post, he wasted no time in tapping a pair of former Boston colleagues for key jobs at BrownHealth: Peter Markell as chief financial officer and Marcia Neiberg as chief strategy and planning officer. Fernandez said he did not foresee a move into Massachusetts when he started his job. But he was aware Rhode Island regulators had blocked Lifespan’s bid to expand there in 2022 through a merger with Care New England, which had three hospitals in the state. Concerned about a similar response, Fernandez took a pass on bidding for two other Rhode Island hospitals last year. So the system was well positioned to look north when Steward filed for bankruptcy this year. It already treated nearly 30,000 residents of Southeastern Massachusetts at its Rhode Island sites. It didn’t hurt that Fernandez worked at Brigham and Women’s with Kate Walsh, now the Massachusetts secretary of health and human services and the governor’s point person on the Steward hospital sales. Fernandez described his bid for St. Anne’s and Morton as “opportunistic.” His team’s thinking, he said, was, “If we can do it at a reasonable price, why not?” Through months of multiparty haggling, BrownHealth was vying with Southcoast Health, which bid for St. Anne’s. Southcoast has a big presence in the area with hospitals in Fall River, New Bedford, and Wareham. Southcoast Health chief executive David McCready declined to discuss the hospital bidding or BrownHealth. But he issued a statement welcoming the competition. “Having another quality health system join our community helps ensure access to care for patients and supports our shared mission to care for our entire community,” he said. In the end, BrownHealth’s purchase price of $175 million — the bulk of which went to buy the hospital land and buildings that Steward sold in 2016 — exceeded both the $140 million Boston Medical Center paid for St. Elizabeth’s and Good Samaritan and the $28 million Lawrence General paid for the Holy Family hospitals. BrownHealth will receive $30 million in transition funds from the state over the next three years, far less than the $165 million provided to Lawrence General; BrownHealth, though, is eligible to borrow another $27 million. (The state hasn’t yet disclosed its full financial package for BMC.) That means BrownHealth will likely have to find other ways to finance capital-intensive medical equipment and infrastructure repairs. Like all the Steward hospitals buyers, BrownHealth faces plenty of other challenges in Massachusetts, where high costs and labor shortages weigh on every health system. It reduced management ranks as a cost-cutting move in September but continues to hire for patient-facing roles, from primary care doctors and specialists to radiologists and nurses. Fernandez said BrownHealth has no plans to reduce services at the Massachusetts hospitals. Indeed, their associated clinics and outpatient operations were an attraction for the Rhode Island system. For employees and communities still traumatized by the Steward meltdown, he’s prepared to do some hand-holding. “We’re largely reassuring them by our actions,” Fernandez said, “showing up, making sure people get paid. We have a track record of success and being in our communities for a long time here in Rhode Island.”
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