State: ECHN, Waterbury Hospital Deals 'Within Statutory Guidelines'

HARTFORD, CT — The Connecticut Office of Health Strategy Monday issued a statement about the progress of the pending acquisitions of Prospect Medical Holdings, Inc. by Yale New Haven Health and the Prospect CT Medical Foundation by Northeast Medical Group and the premise was that "confidential settlement negotiations" are "on-going."

The major players in the deal are Rockville General Hospital in Vernon, Manchester Memorial Hospital and Waterbury Hospital.

The statement from the OHS emerged two weeks after Vernon Mayor Dan Champagne essentially posed the question, "What's taking so long?"

"This is a public health issue that affects the entire region," he said.

The entities announced on Oct. 6 of last year that they had signed documents for Yale to officially acquire two Connecticut health systems from Prospect, including Rockville and Manchester hospitals' parent, Eastern Connecticut Health Network and Waterbury Health. The agreement includes not just the hospitals, but the health systems' related businesses, real estate assets, physician clinic operations and outpatient services.

The purchase price was not disclosed and the deal was subject to customary regulatory approvals. That's when the OHS came into play.

The OHS statement began, "The Office of Health Strategy has offered, and the applicants in this matter have accepted, to engage in confidential settlement negotiations. Those discussions are on-going. The office's goal is to reach an agreed settlement with the parties that will adequately address issues of quality, access and affordability that fall within our statutory obligations and will ensure that any acquisition is in the best interests of the residents of Connecticut. OHS will be looking to the cooperation from the applicants needed to achieve that goal."

The OHS statement said it is "not unusual" for complex hospital acquisitions that require multiple layers of review to take a year or more to complete.

"In this matter, there are three hospitals involved in this transaction — Manchester Memorial Hospital, Rockville General Hospital and Waterbury Hospital, while most other transactions in the past have only involved one hospital," the statement continued. "Additionally, unlike many other hospital acquisition applications, there is a sister application for the transfer of ownership of a medical group. OHS has needed to consider that application both individually and as it relates to the hospital application. Moreover, this application also required that a Cost and Market Impact Review be conducted, and the CMIR in this case took longer to complete than with prior acquisitions due in part to the complexity of the application. To rush any one of these reviews would not serve the interests of the public or be in compliance with OHS's governing statutes.

"Despite all these factors, OHS’s process for this application is still well within the statutory guidelines. Notably, despite contrary assertions, previous applications involving only one hospital and without a medical group transfer have taken nearly the same amount of time. OHS understands the concerns expressed by affected citizens and is processing the various components as quickly as possible."

Manchester Mayor Jay Moran seemed optimistic.

"I'm happy to hear that OHS has heard the frustration and concerns from local leaders, doctors, nurses and citizens," Moran said Monday night. "And I believe they understand the importance of local hospitals and the medical care they provide as well as jobs for so many people. I remain optimistic that the process will wrap up soon and that our local hospitals will be able to continue to offer quality health care to our citizens as it has for over 100 years."

Vernon Town Administrator Michael Purcaro, a former public health official at the state level, has been less-patient and Tuesday morning he was calling for "accountability over diplomacy at this point."

Purcaro continued, "Every second that this deal is delayed, the health and safety of the region is put at greater risk. "While ECHN is struggling to make payroll, failing to pay vendors for essential medical supplies and services, and diverting patients to other hospitals for life-saving treatment, state bureaucrats and businesspeople are arguing over feasibility and profitability. By all accounts, we are witnessing a public health crisis that has widespread healthcare and socioeconomic implications. The people of Vernon and neighboring communities deserve better and demand action."

Waterbury officials could not be reached for immediate comment Tuesday morning.

Officials from the entities involved haven't been commenting, per a confidentiality agreement.

As Champagne noted when asked what he knows about the talks, "It's at the state level now."