State approves deal for Yale New Haven to buy 3 hospitals from Prospect Medical
After an extended wait, Connecticut’s Office of Health Strategy on Wednesday approved an agreement for Yale New Haven Health to purchase three Connecticut hospitals from Prospect Medical, a transfer that would revert the local hospitals to nonprofit status.
The prospective sale includes Rockville General and Manchester Memorial hospitals — operated by Eastern Connecticut Health Network, or ECHN — and Waterbury Hospital, operated by WaterburyHEALTH.
The original sale price for the hospitals agreed to in April 2022 was $435 million, though it’s likely the final price will be significantly lower. A cyberattack on the hospitals and the debts Prospect has since occurred caused Yale officials to renegotiate the original price.
The agreement between the parties announced Wednesday includes stipulations, including the compliance of Yale New Haven Health and Prospect to conditions, including that Prospect pay $55 million in back taxes owed to Connecticut by the date of the closing.
Yale New Haven Health would be required to invest a minimum of $6 million over three years to improve access to mental health and substance abuse treatment.
Negotiations, however, are ongoing.
“There are several outstanding details we need to resolve,” Yale New Haven Health spokeswoman Dana Marnane said.
ECHN spokeswoman Nina Kruse said that the health care network is “working closely with Yale’s leadership to formalize the remaining ancillary
agreements in the coming weeks to transfer ownership of the hospitals” and “we will provide an update at that time.”
Gov. Ned Lamont praised the approach of the end of a lengthy regulatory process conducted by the Office of Health Strategy while continuing to support a final deal.
“This process is an important part of protections under the law to ensure that patients are receiving affordable, high-quality care, and that hospitals will continue meeting all of their obligations to patients, employees, and the community at large,” he said. “With today’s approval by the Office of Health Strategy, I encourage Prospect to work with Yale to reach a deal that will allow them to finalize this purchase and bring a muchneeded resolution to this transaction.”
Marnane said that “while OHS’ approval is an important milestone in this transaction, this process is not yet complete” and that there are “several outstanding
details that must be resolved to allow the transaction to close.”
“We are hopeful that these details can be addressed, so we can extend the benefits of nonprofit, academic medicine to more patients across our region,” she said.
Dr. Deidre Gifford, executive director of OHS, said that the agency is confident that we’ve com e to an agreement that is in the best interest of the residents of Connecticut, which has been our priority since receiving this application,” adding that she expects the three hospitals to “continue to operate and provide high-quality services to their patients and communities.”
Local leaders were optimistic about the prospect of maintaining the viability of hospitals in their area.
Vernon Mayor Daniel Champagne said he welcomes “this initial step in the process to get Eastern Connecticut Health Network out from under the control of Prospect Medical Holdings,” adding that his
administration will examine the terms of the agreement and its impact to Rockville General Hospital.
“Our main focus is ensuring that Rockville General Hospital is a fully functioning medical facility and an integral part of Yale’s plans for our region,” Town Administrator Michael Purcaro said.
Pulmonologist and state Sen. M. Saud Anwar, DSouth Windsor, called the agreement “relieving and promising.”
“I’m grateful that the hundreds of thousands of patients within these hospitals’ area of care will not have that care compromised,” he said. “Yale New Haven Health’s commitment to thorough, nonprofit, academic medicine will provide benefits to the countless people these hospitals serve, and I am confident that the settlement in question meets their needs and demands.”
Anwar said that he’s “confident that this longawaited acquisition will reach its next steps.”