Key CT legislator wary of proposed for-profit hospital moratorium [CT Mirror]

April 3, 2014

Connecticut hospital officials came to the state Capitol Wednesday for their annual lobbying day with a big question mark lingering over the session: How far will lawmakers go in restricting the conversion of nonprofit hospitals to for-profits?

With four of the state’s 28 nonprofit hospitals poised to be acquired by a national for-profit chain, the legislature’s Public Health Committee last week advanced a bill that would place a moratorium on hospitals converting to for-profit, a concept cheered by union leaders and other critics of for-profit health care.

But that proposal is expected to be revised, and on Wednesday, House Speaker J. Brendan Sharkey indicated that he would prefer a less restrictive approach.

“For myself, I think it’s very important that we do not tie the hands of our local hospital networks and their ability to grow in a responsible way,” Sharkey, D-Hamden, said in an interview. “And I’m a little nervous about the notion of doing any kind of a moratorium because I think the world is changing so quickly that I think we can’t afford to be trying to artificially stop what is happening in the marketplace already, very quickly.”

The proposals restricting hospitals’ ability to become for-profit are unlikely to become law exactly as written. But they set the stage for what’s likely to be an intense debate about hospitals, fueled by the discomfort among many lawmakers about the way the health care system is changing.

Sharkey has indicated in the past that his party would work to expand the state approval process for changes in hospital ownership. And he said Wednesday that said it’s important to ensure that differences between for-profit and nonprofit hospitals are accounted for in determining whether changes can take place.

“But fundamentally, I am less concerned about the question of it being for-profit versus nonprofit as I am with the prospect of a takeover occurring among out-of-state versus in-state [companies],” he said. “I think it’s critically important that we maintain a robust hospital network in Connecticut that is Connecticut-based.”

Gov. Dannel P. Malloy has also expressed reservations about a moratorium, saying last month that he was “a little leery of a one-size solution fitting all.” He said he preferred nonprofits, but that there aren’t many nonprofits vying for Connecticut hospitals.

For lawmakers, the question of how to handle the potential conversion of hospitals to for-profits has been a contentious matter.

The proposal that cleared the Public Health Committee would add new regulatory requirements for changes of ownership among nonprofit hospitals and would impose a moratorium on for-profit conversions starting Oct. 1. Hospitals that apply for state approval to convert to for-profit before that would be allowed to proceed with their plans.

Hospital officials say the ability to partner with larger networks is critical to the survival of small, community hospitals and would make them better able to adapt to changes in the health care system. Being for-profit, they say, would give them better access to capital to upgrade facilities and buy costly technology.

“Health care right now is not the place where you want to put too many restraints. It’s too volatile,” Marie O’Brien, chairman of the Bristol Hospital Board of Directors, told legislators during a meeting Wednesday morning.

Bristol is one of four hospitals poised to be acquired by Tenet Healthcare, a national for-profit chain, in partnership with the Yale New Haven Health System. Waterbury Hospital is already seeking state approval to form a joint venture with Tenet, and Tenet is also in talks with the parent company of Manchester Memorial and Rockville General hospitals.

But Tenet Senior Vice President Trip Pilgrim said Wednesday that the bill as written “would preclude us from being in the state of Connecticut.”

Although Pilgrim said people in the four communities Tenet is considering entering are supportive, he added, “There are people that don’t want to see us here in the state. We know that.”

Critics of for-profit health care include unions and advocacy groups such as the Universal Health Care Foundation of Connecticut, which have raised concerns about having hospitals run by companies with shareholders. They’ve pointed to scandals involving for-profit hospitals in other states and warn that some could eliminate money-losing services to improve their bottom lines.

Concerns about the long-term survival of certain hospitals shouldn’t overshadow the need for safeguards for workers and communities, they say.

Public Health Committee Co-Chairwoman Sen. Terry Gerratana, D-New Britain, who helped develop the conversion bill, has likened for-profit hospital chains to big box stores and said it’s important for the state to be cautious about having hospitals in the hands of companies that answer to shareholders.

And many lawmakers, even those who are not opposed to hospitals becoming for-profit, have reservations about changes in the health care landscape, or have constituents with concerns.

Rep. Frank Nicastro, D-Bristol, said during a meeting with Bristol Hospital officials and employees Wednesday that he’d been asked more than 100 times why the hospital was doing this, why changes were necessary. He asked for help explaining it.

Rep. Christopher Wright, D-Bristol, said he believes changes need to be made, but that many of his elderly constituents worry about anything that could change access to their doctors.

Sen. Jason Welch, R-Bristol, said he hears from people in the community with questions about what would happen to designated charitable gifts and to hospital retirees if the Tenet deal goes through.

O’Brien and hospital President and CEO Kurt Barwis said aligning with Tenet and the Yale New Haven system was necessary to anticipate changes in the health care system.

James Albert, president and CEO of the Central Connecticut Chambers of Commerce and a former health care executive, said Bristol Hospital needs a partner to survive. He predicted that the state will one day be dominated by a handful of networks, including one of Catholic hospitals, the Yale New Haven Health System and Hartford HealthCare — a prediction that’s not uncommon among health care experts.

Rep. Whit Betts, R-Bristol, a strong supporter of allowing hospitals to become for-profit, said the key will be to ensure the state has oversight on changes that take place.