It looks as if the third time might be the charm for the sale of Greater Waterbury Health Network and Waterbury Hospital to Prospect Medical Holdings Inc. for $100 million.
The state Public Health Department’s Office of Health Care Access and the state attorney general’s office announced Friday that it was ready to approve the application filed by California-based Prospect Medical Holdings.
The previous suitor, Tenet Healthcare Corp., walked away from the negotiating table over “excessively onerous” conditions placed on the company by state regulators. LHP Hospital Group was the first to try to acquire Waterbury Hospital and Saint Mary’s, but that deal fell apart, mainly over the issue of reproductive rights.
Friday’s draft deal with Prospect Medical Holdings comes with several conditions, including reporting changes in patient care or services to state regulators, health and community need assessments, submission of plans to consolidate or reduce services, and reports to state regulators about how $55 million promised for capital improvements will be spent.
While the public largely spoke in favor of the transaction at a May 3 hearing, there’s still skepticism among some policy makers about the transfer of a nonprofit hospital to a for-profit company.
Lynne Ide, director of policy at the Universal Healthcare Foundation of Connecticut, said in her written testimony that if Prospect Medical Holding “is seeking, ultimately, to turn a profit from this struggling hospital, it stands to reason that they will have to change the way the hospital has been doing business. We are leery of a takeover by a company, who by its very nature as a for-profit corporation, is accountable to its investors, not the local community.”
Prospect Medical Holdings is also in the process of purchasing nonprofit Eastern Connecticut Health Network for $105 million.
Ide said the population in Waterbury is much poorer than the population in Manchester and Vernon, where ECHN operates Manchester Memorial and Rockville General hospitals. The median household income in Waterbury is $41,499 vs. $69,243 for the rest of Connecticut.
“Waterbury deserves to have access to essential services that are affordable, for all residents,” Ide said. “Essential services are not those most profitable for a hospital and health system, but those services that are critically needed in a community, addressing major health concerns of residents.”
State regulators released a final decision on the ECHN deal earlier this month. The deal came with many of the same conditions as the Greater Waterbury Health Network and Waterbury Hospital deal.
Prospect Medical Holdings operates 13 hospitals and 40 clinics and outpatient centers in California, Texas, and Rhode Island, and is much smaller than the hospital’s two previous suitors.
Public comments on the deal will be accepted until Friday, July 1. A final decision will be issued on Friday, July 15.
Public comments to the Office of the Attorney General can be submitted in writing to Assistant Attorney General Gary W. Hawes, Office of the Attorney General, 55 Elm Street, PO Box 120, Hartford, CT 06106. Public comments will also be accepted by .