June 26, 2016

State gives conditional OK to Waterbury Hospital sale

State regulators Friday issued conditional approval of the sale of Greater Waterbury Health Network and Waterbury Hospital to Prospect Medical Holdings, Inc. for $100 million.

The state Public Health Department's Office of Health Care Access, or OHCA, and the state attorney general's office late Friday both released their proposed final decisions to approve the health network's Certificate of Need application, issuing several conditions.

Conditions that California-based Prospect must meet include: reporting to state regulators any changes to patient care or services in the next three years; submitting a health and community needs assessment plan; maintaining current charity and indigent care; hold a semi-annual joint meeting of the board of directors that's open to the public; designate a voting board member position for a community representative appointed by the mayor; submit a three-year service plan for any consolidation, reduction, or elimination of services; and submit a semi-annual report to state regulators showing how funds are spent on capital improvements.

A hearing on the deal, which would include $55 million in capital improvements, was held June 3 in Waterbury. The public spoke overwhelmingly in favor of the transaction at that time

For-profit Prospect Medical is also in the process of purchasing nonprofit Eastern Connecticut Health Network, including Manchester Memorial and Rockville General hospitals, for $105 million, with plans to spend $75 million in capital improvements on those facilities over the next five years.

Prospect now owns 13 hospitals in California, Texas, and Rhode Island. It is also seeking to purchase acute care facilities in New Jersey and Pennsylvania.

State regulators released a final decision on the ECHN deal earlier this month, placing many of the same conditions that the Waterbury network is now facing.

They also stipulated that Prospect could not close either Manchester Memorial or Rockville General in the next three years, and that all staff should be offered similar positions for the same pay and benefits. Attorney General George Jepsen also required that ECHN's charitable donations be managed by a separate, independent fund and used solely for the purpose designated by the benefactor.

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