Courtesy of Waterbury Hospital

Any lingering hope that the state could reach some sort of deal with a Texas-based for-profit hospital chain was dashed Wednesday when Gov. Dannel P. Malloy and Tenet President and CEO Trevor Fetter announced discussions had ended.

In a joint press release, the two sides said they have decided to end discussions regarding Tenet Healthcare Corporation’s plan to purchase five Connecticut hospitals.

Malloy said, “We believe it is best for the hospitals, their employees and the communities they serve to move forward exploring other options.”

Fetter said, “While Tenet is disappointed with the outcome, we wish the hospitals, local community leaders and Governor Malloy the very best in their effort to build a sustainable future for these and other hospitals in the State of Connecticut.”

Waterbury Hospital, which began laying off employees last month, would have been the first acquired by the for-profit hospital chain.

“This is a devastating blow to the Waterbury community as well as the entire state,” Senate Minority Leader Len Fasano, R-North Haven, said. “Governor Malloy had the opportunity to close this deal and he failed.”

Mark Ojakian, Malloy’s chief of staff, swung back at Fasano.

“Senator Fasano has become a partisan talking-point machine, heckling from the sidelines instead of actually doing the hard work of governing,” Ojakian said. “The fact is, Len hasn’t offered one serious idea on the hospital issues in Waterbury. Just like he hasn’t offered one serious idea on the budget, or one serious idea on economic development. He should spend more time working on serious ideas and less time writing letters and press releases.”

Malloy doesn’t believe there’s anything he could have done differently that would have salvaged the deal.

“It just doesn’t work,” Malloy said Wednesday. “If you look at the conditions as laid out in their letter that gave rise to an additional round of discussion — you just can’t do that. Government can’t just sign over responsibilities carte blanche.”

Malloy was referring to a Jan. 16 letter from Fetter. The letter was in response to one Malloy wrote on Jan. 12, asking the company to sit down with his chief of staff and re-start the conversation.

Tenet told state regulators on Dec. 11 that they were withdrawing their applications for all five hospitals based on the number of conditions regulators sought to impose on the purchase of Waterbury Hospital.

“Unfortunately, the result of more than two years of work and more than $2 million of expense was a list of 68 conditions, most of which were excessively onerous and negated any ability for the state, the local communities or Tenet to realize the benefits outlined above,” Fetter wrote in his Jan. 16 letter to Malloy. “As we state in our announcement of withdrawal, our concerns extend beyond the proposed conditions to the overall environment that produced them.”

Fetter’s letter went on to outline his conditions for the purchase. One of the conditions was that the approval process must cover all of the acquisitions concurrently.

“It asks for a very broad, universal agreement on what needed to happen now and in the future and I think that that was not something government can do,” Malloy said Wednesday. “We don’t have a magic wand that we can wave and allow things to happen that are otherwise required to be regulated.”

Waterbury Hospital President and CEO Darlene Stromstad said re-engaging Tenet was just one part of the hospital’s four-part strategy. She said they are also engaged in working on tough decisions through a task force to free up some finances, strengthen key services, recapture some market share, and define the best path forward.

“We are actively making plans for our resurgence and we pledge to do everything we can to ensure sustainable quality healthcare in greater Waterbury for now and long into the future,” Stromstad said.