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CT Approves Prospect Medical-YNHH Deal, Paving The Way For Sale
After 16 months of consideration, the state's Office of Health Strategy on Wednesday approved an application for a Certificate of Need from Yale New Haven Health, paving the way for it to potentially purchase three troubled hospitals owned by Prospect Medical Holdings.
But the long-awaited approval is only the first step. The two hospital chains must now finalize a private deal that was first agreed upon nearly two years ago but is now in danger of falling apart.
YNHH initially agreed in April 2022 to pay Prospect Medical $435 million to purchase Waterbury Hospital and the Eastern Connecticut Health Network, which includes both Manchester Hospital and Rockville General Hospital.
But after a cyberattack debilitated operations across the three facilities for weeks and news of Prospect's growing debts came to light, Yale balked at the purchase price and is seeking to renegotiate it. Hospital leaders have said Prospect owes tens of millions of dollars to vendors, physicians under contract and the state for provider taxes.
One of the conditions of the agreement calls for the state to give Prospect Medical a break on its provider taxes. Prospect owes the state $67 million but would get at least a $12 million tax break, decreasing its debt to the state Department of Revenue Services to $55 million.
"We are confident that we've come to an agreement that is in the best interest of the residents of Connecticut, which has been our priority since receiving this application," Dr. Deidre Gifford, executive director of OHS, said Wednesday in a statement.
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"I want to thank both the Yale and Prospect parties for their collaboration in reaching this agreement. With these conditions in place under the new ownership of Yale New Haven Health, we can expect that these hospitals will continue to operate and provide high-quality services to their patients and communities," she added.
Gov. Ned Lamont also issued a statement, saying the deal "ensures that the residents who live in each of the hospitals' host communities will continue to have local access to essential medical care, and the jobs of the employees who provide this care will be preserved under this new ownership."
"I know that many people have been anxious to get to this day, and I completely understand their concerns. While it may have taken a little bit of time to get here, this process is an important part of protections under the law to ensure that patients are receiving affordable, high-quality care and that the hospitals will continue meeting all of their obligations to patients, employees, and the community at large," Lamont 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 much-needed resolution to this transaction."
The 39-page Certificate of Need, or CON, includes 46 conditions that OHS has placed on Yale, including things ranging from price caps on health care costs to ensuring local participation on the hospitals' boards.
Among the conditions placed on Yale are:
The CON does not allow Yale to return Rockville General Hospital to an inpatient acute care center. Instead it will still operate a 24-hour emergency room and also keep open its much-needed 80-bed inpatient psychiatric units.
There are 24 beds for adult patients, 10 beds for adolescents and 18 beds for elderly patients in Rockville and another 28 inpatient psychiatric beds, six of which are for adolescents, at Manchester.
"Throughout this process, we have worked closely with the state to maintain access to care for the Waterbury, Manchester and Rockville communities," said Dana Marnane, a spokeswoman for YNHH. "While OHS' approval is an important milestone in this transaction, this process is not yet complete. As a next step, we are working with Prospect to reach agreement on several outstanding details that must be resolved to allow the transaction to close. We are hopeful that these details can be addressed."
"We are pleased that Yale New Haven Health, the Office of Healthcare Strategy, and Prospect Medical have reached a joint agreement on the terms and conditions for the granting of the CON that will enable the transfer of Prospect's Connecticut facilities to Yale," Prospect officials said in prepared statement. "We are working closely with Yale's leadership to formalize the remaining ancillary agreements in the coming weeks to transfer ownership of the hospitals. We will provide an update at that time."
OHS has been criticized by lawmakers from Eastern Connecticut and Manchester as well as hospital officials for taking too long to approve Yale' CON's application, which was submitted on November 22, 2023.
OHS held a public hearing on the application in April 2023. Twenty-seven people commented, including the mayors of Manchester and Waterbury, several state representatives, hospital employees and volunteers, and residents. None spoke against the proposed acquisition.
Records show that the YNNHS/Prospect deal has taken longer than several other Connecticut hospital mergers. YNHH's purchase of Milford Hospital in 2019 took 204 days from the time a CON was filed; Hartford HealthCare's acquisition of Saint Vincent's Medical Center the same year took 267 days; YNHH's purchase of the Hospital of Saint Raphael in 2012 took 147 days; YNHH's merger with Lawrence + Memorial Hospital in 2016 took 337 days; and Hartford HealthCare's 2017 acquisition of Charlotte Hungerford Hospital took 351 days.
In a recent interview with The Connecticut Mirror, Gifford defended her office's review of the deal and said the lack of a negotiated settlement between the two parties is impacting the process.
"There's nothing for the office to approve if they don't have an agreement," Gifford said. "The certificate of need or the agreed settlement pertains to an asset purchase agreement, and if there's no underlying asset purchase agreement, there's nothing to move forward on, even if we issued an approval tomorrow."
Gifford added attorneys for both hospital chains have had a draft settlement agreement from the state since Oct. 20.
"We would like to get it wrapped up as soon as possible in a way that protects quality, affordability, access … that's our obligation," Gifford said.
The two hospital chains and OHS officials have been meeting for several months behind closed doors as all three sides agreed to keep the negotiations confidential.
Part of the pressure on Gifford and her office was because of Prospect's spiraling financial situation in Connecticut and other New England states.
Prospect suffered a devastating cyberattack across its three facilities last August, and hospital executives told state leaders that the data breach set them back financially but never revealed how much.
Meanwhile, as the months passed with no agreement, hospital executives, legislators and local officials said the threat of closure is growing, with the Prospect hospitals owing more than $40 million to vendors and physicians, and in taxes.
Physicians said that surgeries had been postponed because health care providers don't have the needed resources. Contracts with traveling nurses and technicians are in jeopardy and remain in place only on a "week-to-week" basis, physicians at the hospitals said. An anesthesiologist group sued Prospect over nonpayment of more than $3 million.
The state, concerned about Prospect possibly going bankrupt, also filed a tax lien because the company owes $67 million in health care provider taxes.
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YNHH officials have said the deal changed since it was first agreed upon in 2022 because of the cyberattack and Prospect's growing debts in Connecticut and needs to be revised.
At one point last year, hospital officials met with Gov. Ned Lamont to seek as much as $80 million from the state to offset the cost of upgrading the three hospitals' computer security systems and help them recover from the cyberattack.
Lamont rejected the plan and said that the privately owned companies needed to work out an agreement and the state would not sweeten the deal.
The delays in this case has many legislators and health officials calling for an overhaul of the CON process. The state requires a Certificate of Need for closures, expansions and other changes to health care facilities.
The Connecticut Hospital Association has urged the state to bolster its process, according to Paul Kidwell, senior vice president of policy for the association.
"If used correctly, the state's Certificate of Need process is a tool to prevent crisis. Unfortunately, inefficient administration of the CON process has resulted in significant delays that have put in jeopardy access to health services for patients in our state," Kidwell said.
State and local elected officials called on YNHH and Prospect to reach an agreement that would complete the sale.
"This is a step in the right direction. I am glad the certificate of need has been approved, but now the two parties have to sit down and in good faith move forward for the communities they serve," said Sen. Saud Anwar, co-chair of the Public Health committee and a physician under contract at Manchester Memorial. The hospitals "need infrastructure support, they need investment in the computer systems, and they need investment in various service lines to be able to manage complex diseases. In order to have those investments, they have to come together and reach a final decision fast."
Manchester Mayor Jay Moran, who has been critical of how long it has taken the state to approve the deal, called the approval a "huge step" for the city because having a local hospital is vital.
"It's so important to have a local hospital, and to now hopefully be part of a great system like Yale will be good for our residents and for all of the people employed there," he said.
"I can't wait for this whole process to be finished."
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Steward Health Care Strikes Deal To Sell Its Nationwide Physician Network To Optum
Business
Democratic U.S. Sen. Edward Markey called on Wednesday, March 27, 2024, for greater oversight of a deal that financially embattled hospital operator Steward Health Care has struck to sell its nationwide physician network to Optum, a subsidiary of UnitedHealth Group, at a press conference in his office at the John F. Kennedy Federal Building in Boston. AP Photo/Steve LeBlanc March 28, 20249:19 AM BOSTON (AP) — Financially embattled hospital operator Steward Health Care has struck a deal to sell its nationwide physician network to Optum, a subsidiary of UnitedHealth Group, as it works to stabilize its finances.
The move comes as Gov. Maura Healey has said state monitors are keeping eye on the nine health care facilities operated by Steward Health Care in Massachusetts, including hospitals in some of the state's poorer communities.
The Dallas-based company operates more than 30 hospitals nationwide.
Before the sale can be completed, the Massachusetts Health Policy Commission must review the proposal.
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The commission doesn't have the authority to block a transaction but can refer findings to the state Attorney General's office, the Department of Public Health, or other Massachusetts agencies for possible further action.
The documents filed with the state did not include a cost for the transaction. Under the deal, Optum would aquire a Steward affiliate that includes the company's primary care doctors and other clinicians in nine states.
Health Policy Commission Executive Director David Seltz said the panel is committed to a "rigorous, data-driven oversight of health care market changes to bring important information to the public."
He said details of the proposal will be studied to examine potential effects on health care costs, quality, access and equity. The sale can't be completed until after the commission's review and any additional reviews by state or federal antitrust authorities.
"This is a significant proposed change involving two large medical providers, both in Massachusetts and nationally, with important implications for the delivery and cost of health care across Massachusetts," Seltz said in a statement.
Emails to Steward Health Care and Optum seeking comment were not immediately returned.
The commission's review of the transaction shouldn't delay state and federal antitrust authorities from doing their own review to protect patient access and affordability, Democratic Massachusetts House Speaker Ronald Mariano said.
Once all required information has been provided about the sale, the commission will have 30 days to assess any potential impacts of the transaction.
If the sale is anticipated to have a significant impact on health care costs and market functioning, the commission can begin a fuller cost and market impact review.
Democratic U.S. Sen. Edward Markey said for-profit companies that participate in the health care system must understand that their decisions have direct impacts on patients and communities.
"With this announcement, Optum must demonstrate that it can meet the even greater responsibility to preserve and protect health care access," Markey said at a Wednesday press conference in Boston. "I hope they will live up to that responsibility by controlling costs and putting patients and providers first."
Markey, chair of the senate's Health, Education, Labor, and Pensions (HELP) Subcommittee on Primary Health and Retirement Security, said he plans to hold a congressional hearing in Boston next week on the impact of for-profit companies on health care access.
U.S. Sen. Elizabeth Warren, a fellow Massachusetts Democrat, said her top priority is making sure Steward's hospitals in Massachusetts stay open.
"After years of gross profiteering and mismanagement, Steward's latest plan raises more serious questions about the future of the Massachusetts health care system," Warren said in a written statement.
"Steward executives have no credibility," she added. "It would be a terrible mistake for Steward to be allowed to walk away while looting Massachusetts one more time."
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OakLeaf Opens Four Clinics In Western Wisconsin, Plans Urgent Care Services In Chippewa Falls
OakLeaf Clinics is expanding across western Wisconsin to fill gaps in critical health care services left by the closures of HSHS St. Joseph's, HSHS Sacred Heart and Prevea Health locations in the region.
OakLeaf Clinics has hired physicians and other health providers to staff four new clinics in Cornell, Ladysmith, Menomonie and Rice Lake. The clinics will open by May 13, according to an OakLeaf release sent Wednesday. The group of physicians also plans to add future urgent care services in Chippewa Falls.
Additional physicians have been added at OakLeaf's facilities in Chippewa Falls and Eau Claire. OakLeaf Clinics hired Dr. Steve Steinmetz who will join the Family Medicine practice at OakLeaf Clinics Chippewa Falls, and Dr. Victoria Vande Zande, who will join the internal medicine practice in Eau Claire.
Maintaining health care options
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"In a rapid move to ensure that patients in Barron, Chippewa, Dunn, and Rusk counties have access to the high-quality health care services they've counted on in their communities despite HSHS exiting the region, OakLeaf Clinics will open new clinics," the release states. "OakLeaf Clinics has hired Prevea physicians, nurse practitioners and medical staff in these cities to serve patients throughout the extended four county area so existing patients of these providers can keep their healthcare with the physicians, nurses and staff they already trust."
OakLeaf Clinics is the largest clinic of independent physicians in OakLeaf Medical Network. With the new clinics, OakLeaf Clinics will have 11 clinics.
The new OakLeaf Clinics will open between May 1 and 13, with three moving into existing Prevea clinic locations.
New OakLeaf Clinics OakLeaf Clinics CornellWho: OakLeaf Clinics has hired Kelsey Meyer, NP and staff, and has assumed the lease to operate out of the same location
Address: 320 N 7th Street, Cornell
Open Date: May 1
OakLeaf Clinics Ladysmith
Who: OakLeaf Clinics has hired Drs. Joel DeKrey and Samantha Runstrom, and Amanda Crabb, NP and their entire staff, and entered into a long-term lease for the clinic building that Rusk County purchased from Prevea
Address: 1101 Lake Ave, West, Ladysmith
Open Date: May 1
OakLeaf Clinics Menomonie, Clinic and Urgent Care
Who: OakLeaf Clinics has hired Kristen Rubenzer, APNP and will be adding additional staff, specialists and primary care providers. In addition, OakLeaf Clinics – Menomonie will be reestablishing the Urgent Care at the same location in the near future.
Address: 2919 Stout Road, Menomonie
Open Date: May 6
OakLeaf Clinics Rice Lake
Who: OakLeaf Clinics has hired Kaley Wilson, APNP, FNP-BC and Bailey Yeager, PA-C, and other staff will be added in the near future.
Address: 1024 N Main Street, Rice Lake
Note — The clinic will be temporarily co-located with OakLeaf Medical Network member Diagnostic Radiology Associates of Wisconsin while a final location is determined.
Open Date: May 13, 2024
"Local access to high-quality health care is critical for communities to thrive," said President of OakLeaf Clinics Dr. Chris Longbella. "We moved quickly to fill the health care needs in these communities with talented providers with deep connections to their communities and help ensure a seamless continuity of care for patients no longer able to access the HSHS/Prevea system."
OakLeaf's expansion is part of a trend of health related services that are popping up across western Wisconsin in response to the HSHS and Prevea closures. Marshfield Clinic Health System announced at the beginning of March that it will add urgent care services at Marshfield Clinic Lake Hallie Center to help address the expected influx of patients seeking emergent and urgent care services in the Chippewa Valley.
Marshfield Clinic Lake Hallie Center seen in March 2023.
Audrey KorteLake Hallie Center is located between Eau Claire and Chippewa Falls off of Highway 53. The clinic is expanding urgent care access in the region for injuries and illnesses, like minor cuts that need stitches or ear infections, that are not life threatening but need care fast.
Marshfield Clinic Health System also has worked to expand same-day access across all its clinics in western Wisconsin. This includes primary care locations in Eau Claire, but also reaches to communities such as Ladysmith, Rice Lake, Chippewa Falls, Menomonie and Cornell.
The announcement came about one year after Marshfield Clinic Lake Hallie Center told the public it would discontinue urgent care services after May 19, 2023.
Stabilizing health care services
The OakLeaf Medical Network is committed to stabilizing access to comprehensive health care services throughout the region, the release states. Urgent care services are planned to be added in Chippewa Falls in the near future.
"OakLeaf Clinics is maintaining all services offered previously by these doctors and nurse practitioners and will be evaluating additional programs and services for the future. Each new clinic will also offer OakLeaf Direct, a high-value primary care program with personalized health care services for employers seeking to improve the overall health and wellness of their employees," the release states.
Once the health care providers and clinics are part of OakLeaf Clinics, the physicians will be independent, and can recommend the best course of care for each of their patients within or outside of the network. Each clinic can choose to participate in community activities at its own discretion, without administrative approval, the release states.
OakLeaf Clinics, the largest clinic in the OakLeaf Medical Network, has 11 divisions providing primary and specialty care in Eau Claire, Chippewa Falls, Cornell, Ladysmith, Menomonie, Rice Lake, and outreach clinics in Altoona, Amery, Baldwin, Black River Falls, Cumberland, Shell Lake, Stanley and Turtle Lake.
OakLeaf also offers the Buffalo River Clinic, Chippewa Valley Anesthesia Associates, Chippewa Valley Eye Clinic, Chippewa Valley Eye Clinic Chippewa Falls, Chippewa Valley Neurosciences, Chippewa Valley Orthopedics & Sports Medicine, Confluence Healthcare, DeFatta ENT & Facial Plastic Surgery, Diagnostic Radiology Associates, Eau Claire G.I. Associates, Evergreen Surgical, Foot and Ankle Clinic, Hesse Foot & Ankle Clinic, Interventional Pain Specialists of Wisconsin, Medical X-Ray Consultants and Merrick Plastic & Hand Surgery.
It has over 350 medical providers including 130 physicians with 40 specialties working across 31 clinics in 15 counties. Over 35,000 primary care patients are served by OakLeaf Medical Network providers.
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