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    Saturday, November 26, 2022

    Yale New Haven Health signs deal to buy three hospitals

    Yale New Haven Health announced Thursday it will buy hospitals in Manchester, Rockville and Waterbury, two medical groups and a visiting nurse service, prompting warnings of greater health care consolidation in Connecticut.

    Financial terms were not disclosed.

    The long-awaited agreement comes eight months after Yale New Haven Health and Prospect Medical Holdings Inc. announced they were pursuing a deal.

    Yale New Haven Health will roll up Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital in Vernon with a combined 708 beds. Yale New Haven Health also will acquire Prospect Provider Group of Connecticut, which includes Alliance Medical Group, ECHN Medical Group and Visiting Nurse and Health Services of Connecticut.

    Eastern Connecticut Health Network, which operates Manchester Memorial Hospital, and Waterbury HEALTH, which runs Waterbury Hospital, have a combined 4,400 employees and would return to not-for-profit status.

    “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, chief executive officer and president of Yale New Haven. “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.”

    Deborah Weymouth, president and chief executive officer of Eastern Connecticut Health, praised the “significant investments” by Prospect to preserve jobs and respond to the community during the pandemic.

    If approved by the state, the three hospitals will become part of the Yale New Haven Health System, similar to Greenwich and Bridgeport Hospitals and Lawrence + Memorial in New London.

    The deal raises questions about health care consolidation in Connecticut.

    State Sen. Matt Lesser, Senate chairman of the General Assembly’s Insurance Committee, said he’ll propose legislation in the 2023 session to address health care consolidation. A task force also is looking at the issue, he said.

    “It’s hard to see how health care monopolies are in the public interest,” he said.

    Lesser, a Middletown Democrat, said restoring hospital rate setting could limit the “monopolistic harm of these behemoths.”

    U.S. Sen. Richard Blumenthal, D-Conn., said Yale New Haven Health will “undoubtedly bring its expertise and resources” to the hospitals and patients.

    “However, the continued consolidation of hospitals and health care services in Connecticut is troubling,” he said.

    When the initial agreement was announced in February, Gov. Ned Lamont and Vicki Veltri, then director of the Office of Health Strategies, expressed concerns about consolidation.

    “You can make a case that that’s part of integrated medicine and better continuum and better service for folks in need,” Lamont said at the time. “You can also say that consolidation leads to jacking ... up prices and disadvantages consumers.”

    Veltri said officials “have concerns in the general market about ensuring that competition remains in our health care market.”

    The Kaiser Family Foundation reported in 2020 that the Medicare Payment Advisory Commission reviewed research on hospital consolidation and concluded that the “preponderance of evidence” suggests hospital consolidation leads to higher prices.

    One analysis of 25 metropolitan areas with the highest rates of hospital consolidation from 2010 through 2013 found that private insurance paid between 11% and 54% more for the average hospital stay.

    A separate analysis of employer-sponsored coverage found prices are 12% higher at hospitals without competitors in a 15-mile radius than hospitals in markets with four or more competitors.

    And another look at hospital mergers over five years found that mergers of two hospitals within 5 miles of one another resulted in an average price increase of 6.2% and price increases continued in the two years after a merger.

    Yale New Haven Health and Prospect are working with the Office of Health Strategy and state Department of Public Health for regulatory approval. The hospital systems said they expect to file in the fall a certificate of need, which is the regulatory program requiring state approvals.

    A public hearing would be required.

    St. Francis sued Hartford HealthCare in U.S. District Court in New Haven in January, accusing it of jeopardizing competition and limiting consumer choice. St. Francis is seeking unspecified damages and an order prohibiting Hartford HealthCare from continuing its acquisitions.

    Hartford HealthCare has acquired the Hospital of Central Connecticut in New Britain, Backus Hospital in Norwich and Charlotte Hungerford Hospital in Torrington. It has acquired St. Vincent’s Medical Center in Bridgeport and added the Southington Surgery Center, other Hartford and Waterford surgery centers, Middlesex Cardiology and Soundview Medical Associates.

    Chief Executive Officer Jeffrey Flaks said in January Hartford HealthCare is improving access and affordability and recruits the best talent.

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