Governor’s “Merger Moratorium” Disregarded As Purchase Is Approved


Manchester and Rockville Hospitals are being sold to for-profit Prospect Medical Holdings, they’re the  predominant assets of the non-profit Eastern Connecticut Health Network.

HARTFORD: Connecticut regulators have given the go ahead to the outright sale of Manchester, Rockville Hospitals, both non-profit community hospitals, to Prospect Medical Holdings of Los Angeles, CA for $105 million. Manchester and Rockville are the predominant assets of the not-for- profit Eastern Connecticut Hospital Network [ECHN].

Prospect currently owns thirteen hospitals in California, Texas and in Rhode Island.

Prospect and the not-for profit Waterbury Hospital have also agreed to a merger and that application is currently under review as well by the Office of Health Care Access.

In February, Governor Dannel Malloy, reacting to a growing list of hospital mergers, put at least a temporary halt on the expansion of the Yale New Haven Health System when he issued an executive order halting all hospital expansions.

Yale and Lawrence + Memorial Hospital in New London were seeking to affiliate through a consolidation and Torrington’s Charlotte Hungerford [celebrating its 100th year] and the Hartford Healthcare system had also announced merger plans.

The New Haven Register reported at the time, however, that Malloy’s order appeared to primarily target the Yale and L+M merger, which was under attack by healthcare unions and legislators from both sides of the aisle.

Malloy said “to provide necessary time for a fair and thorough review, the order directs Department of Health to not make any final decisions on certain hospital acquisition and conversion applications - including those previously received and under review - until January 15, 2017, insofar as permitted by law”

Both Yale and Hartford Healthcare and their merger partners all function as not- for-profit hospitals.

The moratorium order “applies to cases where a smaller hospital would be joining a hospital system that accounts for more than 20 percent of the state’s total hospital operating revenue.”

Prior to the offer for Waterbury by Prospect, Tenet Healthcare of Dallas, Texas had agreed to buy Waterbury and four other hospitals in the state. Tenet announced a plan to invest  $500 million in facilities’ upgrades and affiliate with the Yale New Haven Health System for management of the hospitals. After very strong opposition from the hospital’s health care unions, critics of “for profit” healthcare, and a long list of demands by Connecticut legislators, Tenet withdrew its offer.