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Yale New Haven Health has signed agreements to acquire two health systems from California-based Prospect Medical Holdings, including three hospitals and the health systems’ related businesses, real estate assets, physician clinic operations and outpatient services.
Yale and Prospect jointly announced the acquisition Thursday morning. The parties announced their intent to explore a purchase in February, but a definitive agreement was signed this week.
Waterbury HEALTH, the health system that includes the 357-bed Waterbury Hospital, and ECHN, the system that includes Manchester Memorial Hospital, which has 249 beds, will return to non-profit status under the deal.
The purchase also includes Rockville General Hospital in Vernon, which has 102 beds, along with Prospect Provider Group of Connecticut and Visiting Nurse and Health Services of CT.
The announcement comes at a time when many hospitals in Connecticut are losing money, facing increased costs due to supply chain disruptions and inflation, along with the ongoing labor shortage.
“Now more than ever, it’s critical for us to find ways to creatively sustain local access to high-quality care,” said Christopher O’Connor, CEO and president of YNHHS. “This transaction offers unique advantages to the residents of the communities served and allow for continued patient access to critical healthcare services while being strengthened by the quality-of-care YNHHS is known for nationally.”
ECHN and Waterbury HEALTH have roughly 4,400 employees.
Dr. Justin Lundbye, president and CEO of Waterbury HEALTH, said the hospital is committed to its communities and adapting to the healthcare landscape.
"Along with ECHN, we are proud of what we’ve accomplished, including investing millions of dollars in our communities, preserving jobs, increasing quality ratings and being leaders in Connecticut’s response to the pandemic,” Lundbye said. “We are confident YNHHS will continue this legacy.”
Yale New Haven Health and Prospect plan to file a Certificate of Need application with the state Office of Health Strategy this fall.
If approved, the three new hospitals would join Greenwich and Bridgeport hospitals, as well as Lawrence + Memorial Health in New London, as part of Yale New Haven Health.
Yale New Haven Health said it is focused on preserving local jobs, supporting employee pensions and assessing the future capital needs of the facilities.
“Working with our partners at the Yale School of Medicine, this will create a seamless and integrated delivery system that will serve the best interests of our patients in the most cost-effective manner possible throughout the state of Connecticut and the entire region,” O’Connor said.
Prospect Medical Holdings owns and operates 16 hospitals and more than 165 clinics and outpatient centers, with primary operations in California, Connecticut, Pennsylvania, Rhode Island and Texas.
Manchester Memorial reported an operating surplus of $11.8 million in fiscal 2021 and Waterbury Hospital reported a surplus of $20.2 million, OHS data shows. Both hospitals saw operating surpluses in the previous three fiscal years.
Rockville General posted an operating loss of $16.6 million in fiscal 2021, and lost money in each of the previous three fiscal years, OHS data shows.
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