George Vecchione, left, president and CEO of Lifespan, and John J. Hynes, president and CEO of Care New England, make a presentation to the Greater Providence Chamber of Commerce about the proposed merger yesterday.

The Providence Journal / Bill Murphy

PROVIDENCE — The top boosters for the merger of the state’s two hospital groups, Lifespan and Care New England, have promised many things, including better recruitment of doctors and researchers and improved care.

But in pitching the deal to business leaders yesterday, the chief executive officers of the two nonprofit companies — John J. Hynes, of Care New England, and George Vecchione, of Lifespan — left out one sought-after advantage: lower costs to patients.

In their speeches, hosted by the Greater Providence Chamber of Commerce, the hospital leaders dampened expectations that the merger could bring down health insurance premiums. The best hope, they said, is that it would “moderate” increases in premiums that have exceeded 10 percent a year.

“I don’t realistically think we could drive down the costs,” Vecchione said after his speech at the Providence Marriott.

Instead, the executives emphasized grim predictions of life without the merger, which would create a seven-hospital conglomerate that would provide two-thirds of the state’s hospital services.

Falling reimbursement rates from Medicaid and Medicare and the rising level of service to patients who cannot pay are straining hospital resources throughout the state, Hynes said. If those trends continue, he said, a range of complex procedures will disappear, forcing patients to travel to hospitals in Massachusetts for more expensive care.

“All of us employers will be paying Boston prices for services that could have been provided in Rhode Island at Rhode Island prices,” Vecchione said.

Lifespan operates Rhode Island Hospital and Miriam Hospital, both in Providence, Bradley Hospital, in East Providence, and Newport Hospital. Care New England operates Women & Infants Hospital and Butler Hospital, both in Providence, and Kent Hospital, in Warwick.

In the last year, Lifespan spent $65 million on uncompensated care. For Care New England, the bill reached $25 million, Hynes said. The day before he spoke, Kent Hospital announced an $8.9-million operating loss for the year that ended Sept. 30.

“The environment in which we have to operate is very difficult,” Hynes said yesterday. “Most of the hospitals in the state are losing money. That is not a sustainable model.”

If Rhode Island employers begin sending workers to Harvard University-affiliated hospitals for medical care, Hynes said, it would raise insurance premiums, co-pays and deductibles. Even with the improvements in services here, he said, out-of-state companies such as Boston-based Partners HealthCare are competing with Rhode Island hospitals for patients, researchers and doctors.

“They are a major source of competition for our systems going forward,” Hynes said. “We need some decisive steps right now. It’s not a theoretical issue.”

Simply maintaining the current system, however, may not satisfy business owners in Rhode Island.

Health care has become an increasing burden, leading many local companies to cancel their employer-sponsored plans, or to require employees to contribute higher percentages of the premiums.

“The business community wants to know what will happen with rates,” Laurie White, the chamber president, said yesterday. The proposed merger, she said, “has huge ramifications.”

For the hospitals, at least, the proposed merger is expected to cut expenses.

The combined company would gradually eliminate a range of redundant positions, as information technology and financial staff retire and are not replaced. The new conglomerate would avoid buying duplicate equipment at its hospitals, and it would invest in a shared electronic system for maintaining patient information.

At their current sizes, the two hospitals have 17,600 employees and $2 billion in annual revenue.

The savings would pay for a new Level 2 trauma center at Kent Hospital, several women’s health centers associated with Women & Infants Hospital, and investment in training nurses to address a shortage in the state. The merger would also help advance medical research, Vecchione said, and populate the Jewelry District with new start-up businesses.

The proposed conglomerate, to be called Lifespan, would not use its dominance to raise the cost of its services, Vecchione said.

Similar consolidations in Massachusetts have resulted in higher health-care costs. But yesterday, Hynes dismissed that possibility here as a “bogeyman. That’s certainly not our game plan,” he said.

But neither will the merger provide relief from the current high cost of medical care.

In his speech, Vecchione said he did not expect the merged companies would have any new “leverage” in negotiations with health insurers. And for the first few years, he said, existing agreements would continue to set prices.

Lifespan recently signed a new contract with Blue Cross & Blue Shield of Rhode Island that does not expire until 2010. The company, Vecchione said yesterday, plans to honor the agreement if the merger goes through. Its contract with UnitedHealthcare of New England does not expire until June 2009.

For Care New England, the Blue Cross contract expires next December. But the UnitedHealthcare contract lasts until 2010.

Though it was first announced in July, there is still plenty of time to debate the merger.

Yesterday, the two executives said they could not predict when the Federal Trade Commission would rule on the proposal. Under the state Hospital Conversions Act, the deal also needs the approval of the attorney general, Patrick C. Lynch, and Health Director David R. Gifford.

bgedan@projo.com