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December 17, 2018 Five We Watched in 2018

Agwunobi fields UConn Health partnership proposals

Photos | HBJ File UConn Health CEO Andrew Agwunobi.
By Matt Pilon

Headed into 2018, one of UConn Health CEO Andrew Agwunobi's biggest priorities was to find the right partner to strengthen the health system's future financial and clinical profile.

As the year draws to a close, much has been done toward that effort, though it may still be a few more months until the public learns of the results.

UConn Health's board of directors informed lawmakers in April that a public-private partnership may be the system's best chance at long-term sustainability. UConn Health, staffed by unionized, state employees, struggles with a high cost structure and ever-evolving competitive threats from area health systems that are growing through hospital acquisitions.

UConn Health has been vague about what exact structure a deal might entail, but it could involve a merger or joint venture, and any partnership would likely help support UConn Health's clinical operation and include a sizable cash payment to the system.

The Commission on Fiscal Stability and Economic Growth wrote recently that a deal could also reduce UConn Health's drag on the state budget by nearly $100 million a year.

In October, UConn Health took the next step, requesting proposals from health providers and other entities interested in a partnership with its clinical operation, which includes the 234-bed John Dempsey Hospital and UConn Medical Group.

Responses were due to UConn's financial advisor, Cain Brothers, in early December.

Several days after the due date, the Hartford Business Journal filed a Freedom of Information request for any submitted proposals. UConn Health denied the request, citing an exemption in the law that covers responses to solicitations prior to a contract being negotiated or executed. As a result, it's unclear who the suitors may be, but a UConn official confirmed the solicitation received more than one proposal.

Agwunobi has said UConn Health could sign a nonbinding letter of intent with a partner by early 2019.

While the system is budgeting for an $18 million operating loss this fiscal year, Agwunobi said UConn Health has improved in ways that would matter to a potential partner.

For example, Dempsey has grown its market share in the Farmington Valley, and its 2018 patient admissions grew by 9 percent compared to 2017, while visits to UConn Medical Group providers were up more than 16 percent — all details disclosed in its October solicitation.

In April, it completed a two-year, $100 million implementation of an Epic electronic medical record system.

It's the same type of system used by many major area hospitals.

“We are a stronger institution than we've been in years past,” Agwunobi said.

However, he's concerned about longer-term headwinds, such as narrow networks that exclude UConn, lessening its patient volume.

Besides the ongoing partnership evaluation, Agwunobi said another significant 2018 development was UConn Health ceding its contract to provide healthcare services to more than 13,000 inmates in the state prison system.

Concerns were raised over prisoners' quality of care in recent years, but Agwunobi said UConn Health asked to give up the contract because it was losing money for the health system.

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