Rehabilitation Hospital to return to for-profit status in new joint venture

Rehabilitation Hospital to return to for-profit status in new joint venture

The Rehabilitation Hospital of Rhode Island will return to for-profit status under a new joint venture between Landmark Medical Center and Kindred Healthcare. (Breeze photo by Lauren Clem)

NORTH SMITHFIELD – The Rehabilitation Hospital of Rhode Island will return to for-profit status in a new joint venture between Landmark Medical Center and Kindred Healthcare, a Kentucky-based company specializing in long-term and rehabilitative services.

Prime Healthcare, parent company of Landmark, announced last Wednesday the two companies would form a joint venture to own and operate the North Smithfield-based rehabilitation center. Under the agreement, Kindred will hold a 60 percent ownership stake and Landmark will own 40 percent.

Landmark spokeswoman Carolyn Kyle said the change from nonprofit to for-profit status would not affect the level or quality of care at the rehabilitation center.

“Kindred is a very well established and resourced organization. We are hoping that together, we can build a continuum of care that represents best in class care,” she said.

Landmark and RHRI are currently owned and operated by Prime, which received approval to convert both facilities to nonprofit status in 2017. At the time, the North Smithfield property was valued at about $12 million, resulting in a tax loss for the town of about $250,000.

Kyle said the venture was an opportunity to enhance rehabilitative services at the hospital with a well-known company. Kindred, according to a press release, operates in 1,731 locations in 46 states and has annual revenues of approximately $3.2 billion.

“This partnership is built upon the Rehabilitation Hospital of Rhode Island’s outstanding reputation, which will be enhanced by the clinical expertise and patient outcomes for which Kindred Healthcare is well known,” Mike Souza, CEO of Landmark and RHRI, said in a statement. “We look forward to working with Kindred to develop a best in class continuum of care.”

Russ Bailey, chief operating officer of Kindred Rehabilitation Hospitals, said the partnership could result in expanded services at RHRI.

“We have great respect for the professionals at Landmark and look forward to entering the Rhode Island and greater New England markets in partnership with them,” said Bailey. “This partnership will enable us to expand the services provided and help more patients recover from their illnesses or injuries, restore function and regain the independence needed to get back to their lives.”

RHRI is currently licensed for 82 rehabilitation beds.

According to the release, the two companies expect to complete the transaction by the third quarter of 2020.