Merger veto survives [Waterbury Republican-American]

July 24, 2013

Article as it appeared in the Waterbury Republican-American

Lawmakers refuse to give hospital legislation another shot

Lawmakers passed on the opportunity Monday to revive legislation that would benefit proposed hospital mergers in Waterbury and Bristol. As expected, the legislature let stand Gov. Dannel P. Malloy’s veto of the bill, even though an override vote had a strong likelihood of succeeding. The vetoed legislation was considered crucial to the proposed joint venture between Waterbury Hospital and Vanguard Health Systems Inc. It was also important to Vanguard’s plans for another joint venture with Bristol Hospital.

The bill proposed an exception to state law that the proposed joint ventures needed to hire physicians. The Democratic-led House and Senate met briefly in a required trailer session Monday to reconsider eight vetoed bills. The veto session was quickly adjourned without any override votes being called. After the session, Sen. Joe Markley, R-16th District, and Rep. Whit Betts, R-Bristol, objected that Democratic leaders did not even bring up the hospital hiring bill for discussion Monday morning. The House and Senate each passed the bill with more than the required votes to override Malloy’s veto. If the votes held, an override would have been a certainty. Instead, Markley said, the Democratic leadership deferred to the governor — to the legislature’s detriment. “We didn’t hold up our end. We didn’t try to become part of the conversation or part of the solution. We have just decided to stay on the sidelines and see what comes forward,” he said.

Markley represents part of Waterbury. He said this is the second hospital merger that the administration has scuttled. “I think that the governor has an obligation to the city of Waterbury to try to do something to make this work,” Markley said. The other proposed joint venture involved Waterbury Hospital, Saint Mary’s Hospital and LHP Hospital Group of Plano, Texas.

This earlier deal fell apart after Malloy and others raised objections because the three partners were not planning to offer abortions and other reproductive services at a new hospital they planned to build in the city. The administration threatened to withhold state assistance to the project. Betts said Bristol Hospital expected a joint venture with Vanguard would provided needed capital to upgrade its facilities and infrastructure. The veto has set those plans back, he said. State law now permits nonprofit hospitals, health systems and medical schools to form nonprofit medical foundations to practice medicine and deliver health care through doctors and other providers that the foundations employ. The vetoed bill would have granted Vanguard membership in each hospital group’s medical foundation. Membership would allow Vanguard to retain the physicians who work for each hospital.

In his veto message, Malloy objected to carving out such specific and narrow exceptions. “This is not just about two hospitals. This is about the entire hospital system in Connecticut,” Betts said. All but one of the state’s hospitals are nonprofit institutions. Several hospitals are contemplating changing to a for-profit model. At this time, Sharon Hospital is the state’s only for-profit hospital. Malloy also vetoed the bill because he has reservations about the direction the state’s hospital industry appears to be taking. He has additional questions about Vanguard because Tenet Healthcare Corp. of Dallas is acquiring the smaller company in a deal that was announced last month. The acquisition price is close to $1.8 billion.

Markley and Betts said Malloy raises legitimate questions, but they doubt those concerns are why he vetoed the bill. Markley said he believes Malloy vetoed the bill because of a labor dispute at Waterbury Hospital. He is skeptical of the governor’s statements to the contrary. The dispute involves the union representing employees working in food service, housekeeping and patient transportation at the hospital. The union has accused a new company that assumed the contract for providing these services of failing to recognize the union and hire its workers

“I think everybody understands behind all this was his desire to respond to the union’s concerns,” Markley said. Markley and Betts said the governor’s staff participated in the drafting of the bill during the frenzied final hours of the General Assembly session. “If they had serious questions or reservations, they could have just easily said, ‘Time has run out.’ We could have postponed it, but they did not do that,” Betts said.