Sen. Kane: We must ensure Waterbury Hospital’s continuance as a provider of quality care and jobs (Waterbury Republican-American)

December 3, 2014

Decision gets warm welcome
70 conditions don’t deter Tenet proposal


Legislators from the region gave a warm reception Tuesday to state regulators endorsing Tenet Healthcare Corp’s proposal to acquire Greater Waterbury Health Network — and placing almost 70 conditions on them.

The state Department of Public Health’s Office of Health Care Access, or OHCA, and the attorney general’s office Monday issued a draft decision approving Dallas-based Tenet’s request to purchase GWHN, the parent of Waterbury Hospital. In the for-profit joint venture, Vanguard Health Systems, a Tenet subsidiary, will acquire 80 percent of GWHN for $45 million, while a newly formed GWHN charitable foundation would buy the remaining 20 percent interest for $6.6 million.

OHCA’s decision includes almost 50 conditions, including adhering to the Internal Revenue Service’s “community benefit standard” and submitting to OHCA its seven-year strategic plan to spend $55 million on capital improvements within 150 days of the closing date.

The attorney general’s office’s decision had more than 20 conditions, including that the hospital may not be relieved of its $55 million capital commitment due to changes in federal or state laws.

The decisions included several conditions that will protect jobs and hospital services, including OCHA’s requirement that the hospital not reduce clinical staffing levels for five years, said Rep. Theresa W. Conroy, D-Seymour.

“I think the state came up with some good recommendations,” said Conroy, a member of the legislature’s Public Health Committee.

She also favored OHCA’s requirement that essential services be kept for seven years, as well as the attorney general’s stipulation that the hospital must fulfill its $55 million capital commitment.

“By doing these upgrades, it will attract physicians to the area,” she said.

It’s not unusual for OHCA and the attorney general’s office to place numerous conditions on a proposed for-profit conversion, said Sen. Terry B. Gerratana, D-New Britain, who is the committee’s chairwoman.

“Most of those conditions are making sure people have access to quality healthcare,” she said, recalling many being placed on Sharon Hospital’s becoming the state’s only for-profit hospital in 2002. “That’s OHCA’s mission.”

Tenet’s acquisition of GWHN will help ensure the hospital’s continuance as a provider of quality healthcare and jobs, said Sen. Robert J. Kane, R- Watertown, who is also a committee member.

“In speaking with people at the hospitals, they both said without this merger we can’t survive,” he said. “This is a good day for Waterbury because we need the healthcare, and their survival is of utmost importance to Waterbury for the jobs they provide.”

There is concern, however, that Tenet’s partnership with Yale New Haven Health System as it also looks to buy four other Connecticut hospitals will lead to healthcare in the state being offered by only a “handful” of networks, he said.

“It may not be a free market anymore,” said Kane, who is also a member of a bi-partisan, monthly Round Table on Hospitals and Healthcare. “The number of players is diminishing.”

Gerratana and Kane said they have yet to look closely at the conditions placed on the proposed joint venture.

Both state agencies expect to make a final decision on Dec. 17. Written public comments are being accepted until Monday.

Dallas-based Tenet, which owns 80 hospitals nationwide, is also seeking to acquire Saint Mary’s Health Systems Inc., the parent of Saint Mary’s Hospital in Waterbury, for $150 million. OHCA and the attorney general’s office plan to issue a proposed final decision on that deal on Jan. 12.

The Public Health Committee drafted law addressing the conversion of nonprofit hospitals to for-profit in the state during the 2014 legislative session. The measure was signed into law by Gov. Dannel P. Malloy in early June.

In part, the legislation, which took effect in October, allows for-profit ventures to form medical foundations to hire doctors without violating anti-kickback laws. It also requires state regulators to approve the acquisition of eight or more physicians by hospitals and health systems.

The legislation has done its job in requiring public hearings on the state’s regulatory process and putting in measures to benefit the community, said Rep. Whit Betts, R-Bristol, also a committee member. They include requiring that money put in charitable foundations of new for-profit hospitals go toward enhancing the hospital and the community, he said.

“It sounds like everyone did their job and the legislation addressed concerns expressed by unions and the community,” Betts said.