(Updated 8:24 a.m.) Attorney General George Jepsen and the Office of Health Care Access gave their blessing Monday to an agreement that allows a Dallas-based, for-profit hospital chain to take over the nonprofit Waterbury Hospital.
The tentative decision allows Vanguard Health Systems and its parent company, Tenet Healthcare Corporation, to take over the assets and operations of Waterbury Hospital. A final decision will be made Dec. 17 and the public has until Dec. 8 to weigh in on the draft decision.
Waterbury Hospital was the first of several in Connecticut that Tenet, which owns 80 hospitals, was eyeing for a possible takeover. Tenet is in the process of buying two Eastern Connecticut Health Network hospitals: Rockville General Hospital in Vernon and Manchester Memorial Hospital. It is also in negotiations with Bristol Hospital. Legislation passed earlier this year by the legislature made it possible for for-profit hospitals to employ doctors without violating the law and cleared the way for the takeover to be approved.
According to the proposed draft agreement, Jepsen believes the hospital’s assets are worth $45 million and the payment for them should be in cash. He also wants a $55 million capital commitment from Tenet and improvement in ambulatory services within the next seven years.
In a statement Tenet said they are still reviewing the decision.
“While Tenet Healthcare is pleased the rulings favor the purchase of Waterbury Hospital, the documents are lengthy and complex and contain a long list of conditions, many of which are concerning to us,” the corporation said. “We will work closely with the state over the next several days to better understand the ruling and associated conditions. We appreciate all the hard work so many people have put into this process.”
In addition to the purchase price and the capital improvements, the decision asked for the charitable assets of the hospital to be held by the foundation.
“The charitable assets of Waterbury Hospital, which have been held in trust for the public, will continue to be held by the WH Foundation and safeguarded for uses to promote healthcare in the Waterbury area,” Jepsen’s decision reads.
The unions who represent the workers at the hospital were initially wary of the merger, but appeared to be encouraged by Monday’s draft decision.
Barbara Simonetta, president of CT Health Care Associates, and Sal Luciano, executive director of Council 4 AFSCME, said they are pleased with the decision.
In a joint statement the two pointed out that regulators have ”prohibited cutbacks in staffing levels and unfair price increases for patients and health plan providers, established an Independent Monitor and Community Advisory Board to oversee and recommend changes, required the Hospital to enter into a Community Benefits Agreement with area organizations to safeguard services, required the establishment of a new community foundation, increased charity care for the uninsured, required regular public input and detailed reporting to allow regulators to best evaluate service and workforce changes, and more.”
Hospital employees worried during public hearings that privatization would lead to layoffs and reduced work hours, but executives for Tenet have said they have nothing to fear.
Tenet’s acquisitions of nonprofit hospitals will ease the pressures the hospitals feel, Harold “Trip” Pilgrim, senior vice president of development at Tenet Healthcare Corp., told lawmakers earlier this year. The corporation’s size can, among other things, allow hospitals to take advantage of centralized human resources and information technology systems to cut costs, he said.
The discussions of the takeover have been ongoing for years.
Waterbury Hospital President and CEO Darlene Stromstad said she is proud Jepsen recognized the hard work of the board of directors in trying to put together the deal.
“The Waterbury Hospital team, along with Tenet Healthcare, is currently reviewing the proposed final decisions, which grant approval of the transaction with certain conditions being met—these are extensive documents on some very complex issues so it will take some time to examine,” she said in a statement. “Waterbury Hospital leadership is grateful to our employees and medical staff for their ongoing support and patience during this long process.”