Chafee won't veto bill; Landmark hospital buy a go

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A potential obstacle to the sale of a troubled hospital in the struggling city of Woonsocket has been removed, as Gov. Lincoln Chafee said Friday he will allow legislation considered necessary for the purchase to become law.

Chafee said he will not veto legislation sought by Steward Health Care System, whose purchase of Landmark Medical Center was approved by state officials last month.

The changes to the Hospital Conversions Act eliminate a three-year waiting period for a for-profit company to buy another hospital. Landmark’s affiliate in North Smithfield, the Rehabilitation Hospital of Rhode Island, is also part of the purchase deal.

“I am very pleased that the Governor will not veto this legislation that is so critical to saving the hospital,” Woonsocket Mayor Leo Fontaine said in a statement. “We all understand that the closure of Landmark would be devastating to our community in many ways.”

Landmark is the only hospital in Woonsocket and the dominant acute-care medical facility in northern Rhode Island.

Chafee indicated earlier this week he might veto the bill, and Woonsocket officials have said they were told that would kill the deal.

Fontaine said he’s hoping to use the Landmark sale – and the revival of the hospital, which has been under court supervision since 2008 – as a way to boost economic development in Woonsocket. He wants to create a “medical overlay district” in the area around the hospital.

Woonsocket is on the brink of bankruptcy, in part because of a $10 million schools deficit. A state-appointed commission is hurrying to craft a balanced budget and save the city from further state intervention, and even possible bankruptcy.

Chafee will let the legislation become law without his signature.

“I believe that the good in this important bill outweighs the bad,” he said in a statement. “… Healthcare is an important industry in our state, supporting tens of thousands of Rhode Island jobs, and the Hospital Conversions Act will serve to further strengthen this critical sector of our economy.”

Chafee had concerns about eliminating the required waiting period, but said he is now confident that state regulators have the power to oversee hospital purchases.

He also was concerned that language in the bill relating to judicial review was inconsistent with another state law. Chafee said he plans to propose legislation next year to clarify the bill.

Fontaine applauded Chafee for his decision.

“Though the Governor voiced some concerns he has about the legislation, he has remained true to his commitment to a quality full-service hospital in our city, and for that I am grateful,” he said.

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