DAILY NEWS CLIP: October 30, 2024

Corey: UConn should acquire Waterbury Hospital if Yale deal collapse


Republican-American – Tuesday, October 29, 2024
By Paul Hughes

U.S. Senate candidate Matt Corey proposed to Gov. Ned Lamont that UConn Health acquire Waterbury, Manchester Memorial and Rockville General hospitals if a negotiated sale to Yale New Haven Health collapses.

Corey, a lifelong Manchester resident, suggested what he called a “Plan B” in a letter to Lamont dated Tuesday the Corey campaign made public one week from the Nov. 5 election. The Republican businessman is challenging two-term Democratic incumbent Sen. Christopher Murphy for the second time in six years.

Corey expressed concern the three hospitals that serve 500,000 state residents might be unable to survive if the sale to Yale falls apart.

“We all share an interest in preventing that awful situation,” he wrote.

The Murphy campaign declined to comment on Corey’s recommendation. It referred to remarks Murphy made during a committee meeting in September in which he held out Prospect and its operation of its three Connecticut hospitals as an example of how private equity firms subverted health care to maximize profits.

The governor’s office did not immediately respond to messages seeking comment on Corey’s recommendation.

Yale and Prospect Medical Holdings negotiated a $435 million sale of the three Prospect-owned hospitals in October 2022, but the deal started to unravel shortly after the state Office of Health Strategy approved a certificate of need for the transfer of ownership March 27.

Yale filed for a declaratory judgment in May that it is not obligated to close the sale because California-based Prospect allegedly violated the purchase agreement. Prospect brought a counterclaim against Yale for allegedly breaking the agreement by refusing to pay the negotiated $435 million sales price. The two cases have been consolidated in Hartford Superior Court. The case is scheduled to go to trial in April 2025.

At this time, Yale and Prospect remain at legal loggerheads. Yale is now requesting the court’s permission to amend its complaint for the second time to claim additional breaches of the purchase agreement.

Yale alleges irresponsible financial practices, severe neglect and general mismanagement by Prospect has left the three hospitals a shell of what they were when Yale agreed to acquire them. Prospect has denied those allegations, and it has maintained Yale knew it was purchasing three hospitals faced with serious financial and operational struggles, and it agreed to purchase them on an “as is,” “where is” and “with all faults” basis.

In his letter, Corey applauded Lamont’s efforts to try to help Yale and Prospect resolve their differences to complete the sale, and urged the Democratic governor to redouble those efforts. If the two sides are unable to negotiate a resolution, he suggested UConn Health as a “backstop buyer” for the three hospitals.

“While UConn has had its own budget issues, it has access to fiscal resources which can absorb the cost of transition,” Corey stated.

In addition, he suggested the state government could exercise eminent domain powers to acquire the three hospital properties from Medical Properties Trust, the Alabama-based real estate investment trust that purchased the buildings and grounds for the three Connecticut hospitals from Prospect in 2019 for $457 million and leased them back to Prospect.

“My hometown cannot lose its hospital. I offer this suggestion today as a constructive suggestion to prevent that from ever happening,” Corey wrote to Lamont.

UConn Health announced in June it expects to generate more than $1 billion in patient care revenue from its hospital and clinical operations in the coming fiscal year. In late May, an independent consultant issued a final report to Lamont and University of Connecticut President Radenka Maric providing an overview of different strategies and models for UConn Health to achieve a larger scale and greater financial stability, including to sell or otherwise privatize its John Dempsey Hospital.

UConn Health Center and John Dempsey Hospital have generated cash-flow losses averaging $140 million per year between 2020 and 2023, according to Cain Brothers, an investment banking firm specializing in health care the Lamont administration commissioned to prepare the $504,000 study. The Farmington health center also houses UConn’s medical and dental schools. The Cain Brothers report recommended options such as exploring the sale of Dempsey Hospital or linking it in partnership with a private acute-care network.

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