WATERBURY -- After several failed attempts dating back to 2008, it appears Waterbury Hospital is about to receive the cash infusion it has needed to take it off of life support. The Greater Waterbury Health Network, the parent company of the Waterbury Hospital, has agreed to be bought out by Prospect Medical Holdings of Los Angeles.
Prospect Medical Holdings owns 13 hospitals, and 40 clinics and outpatient centers in California, Texas and Rhode Island. It is privately held.
Hospital officials say they expect to generate $10 million less in healthcare reimbursements this year, which has forced them to lay off the equivalent of 80 full-time workers. The hospital employs about 2,000 people.
Unlike several past proposals, this agreement would not be a package deal including Waterbury's Saint Mary's Hospital. Complexities created when trying to partner a secular and non-secular hospital work too great to overcome, according to Waterbury hospital President and CEO Darlene Stromstad.
St. Mary's Health System President and CEO Chad W. Wable released the following statement about the deal:
Given Saint Mary’s strong and stable clinical and financial performance, Prospect would not be an appropriate match to help Saint Mary’s meet our ambitious Vision and Strategic Plan.
We are 100 pecent committed and focused on remaining a faith-based, mission driven, and not- for-profit hospital at Saint Mary’s. We are changing the conversation to focus not only on capital but also on carefully selecting a strategic partner who will fund and accelerate our Strategic Plan. Our focus is on achieving our vision of becoming an integrated network of healthcare providers creating exceptional value for those we serve through trusted partnerships that empower and transform lives.
Prospect Medical Holdings says Connecticut's demographics are perfect for its business plan. "There's almost no managed care penetration," said Thomas M. Reardon, president of Prospect East. "There is a fragmented physician market. There's a health exchange. There's alot of dual eligibles, an aging population."
One obstacle that popped up during deals in the past was objections from employee unions, which suspected job cuts would be part of previous proposed deals.
"We are going to assume the union contracts," said Reardon. "We're going to assume the pension plans. There's not going to be any issue. In Rhode Island, we had the union shoulder to shoulder with us advocating in favor of the conversion."
The most recent attempt to purchase the hospital was in February to Tenent Healthcare, but it fell through.
The full terms of the agreement were not disclosed.
The two organizations will need approval from the Connecticut Office of Health Care Access and the Office of the Attorney General, in addition to other state and federal agencies.
