Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

February 10, 2022

Yale New Haven Health to buy Manchester Memorial, Rockville General and Waterbury hospitals

Yale New Haven Health CEO Marna P. Borgstrom.
By Zachary Vasile

In a deal almost certain to reconfigure the healthcare landscape in northern and central Connecticut, Yale New Haven Health has announced plans to acquire two health networks, including three hospitals, from California-based for-profit hospital operator Prospect Medical Holdings.

Under the terms of an agreement signed Thursday, Yale New Haven Health would buy Manchester Memorial Hospital, Rockville General Hospital in Vernon and Waterbury Hospital, along with all of their associated real estate assets, physician clinic operations and outpatient services.

Manchester and Rockville operate under the banner of Eastern Connecticut Health Network, while Waterbury Hospital is the flagship of Waterbury HEALTH. Together, the two Prospect-run systems have approximately 4,300 employees.

All three hospitals would switch to not-for-profit status under Yale New Haven’s ownership, officials confirmed. Prospect made headlines when it first entered the Connecticut market years ago because it was a for-profit operator, an unfamiliar model for hospitals in Connecticut.

The proposed deal would have to be cleared by regulators before either of the health systems change hands. Still, Yale New Haven Health and Prospect said they believe the transaction will be completed later this year.

“As we begin to emerge from an international pandemic that has devastated many hospitals across this nation, it is critical that we think creatively about sustaining local access to high quality care,” said Yale New Haven Health CEO Marna P. Borgstrom. “Innovation has become a watchword for a post-pandemic healthcare environment, and we are all exploring clear opportunities to enhance access to high-quality care while driving down costs. While this is at a very early stage, our goal is to sustain critical access to vital healthcare services directly in these local communities.”

The planned triple-acquisition marks a major incursion by Yale New Haven into what has traditionally been Hartford HealthCare’s backyard. Hartford HealthCare has recently moved into Yale New Haven’s territory with the opening of new locations in Fairfield County, setting the stage for increased competition between the two systems.

The deal also comes as figures in Connecticut’s healthcare industry, as well as some government officials, voice increasing concern over the concentration of the state’s health services in the hands of a few major players, giving them outsized influence in setting prices.

Last month, those anxieties were put on full display as Hartford-based St. Francis Hospital and Medical Center filed a lawsuit against Hartford HealthCare, alleging unfair and monopolistic business practices. St. Francis contends that HHC is buying up physician practices, particularly in cardiology, in a bid to force St. Francis out of the market.

Hartford HealthCare has said the lawsuit is without merit.

In fiscal year 2020, the latest data available from the Office of Health Strategy, Prospect Medical’s Connecticut operations reported operating income of $11.9 million and an overall surplus of $2.2 million. However, in fiscal year 2019, it reported an $8.7 million operating loss and an overall loss of $18,9 million, OHS data shows. 

Manchester Memorial and Waterbury hospitals each reported operating surpluses in fiscal 2020, of $19.3 million and $19.5 million, respectively, OHS data shows. Both hospitals reported operating surpluses in the previous three fiscal years as well. 

Rockville General posted an operating loss of $4.8 million in fiscal 2020, and lost money in at least each of the previous three fiscal years, OHS data shows. 
 

Sign up for Enews

Most Popular

Most Popular

0 Comments

Order a PDF