CT warns ‘prices will increase substantially’ with NY Northwell Health’s takeover of Nuvance Health

CT Insider – Wednesday, February 12, 2025
By Rob Ryser

DANBURY – A New York health giant’s takeover of the parent company that runs Danbury and Norwalk hospitals is likely to increase the cost of going to the doctor for western Connecticut residents, but that would be the deal’s only downside, a state agency says.

“Outside of the concern that prices will increase, the transaction appears to be positive by nearly every other measure,” reads a 70-page impact report by the Connecticut Office of Health Strategy about the $20 billion affiliation proposed one year ago between New York’s Northwell Health and Danbury’s Nuvance Health. “Given Nuvance’s financial struggles, it is likely that without a strategic partner, access and quality at Nuvance’s three (Connecticut) hospitals could continue to deteriorate.”

The state’s impact report, which is the final step in the oversight agency’s nine-month review of the proposed merger, took into account objections by the two health care systems who argued that the new affiliation would not necessarily lead to price increases. Specifically, Northwell’s plan to invest $1 billion in Nuvance hospitals and medical services sites could pay off in profits without needing to raise prices, the health systems argued.

[I]nvestments may increase commercial revenues at a particular hospital, separate and apart from any potential impact on pricing,” Northwell and Nuvance wrote in a joint reply to the state health strategy office in mid-January. “Commercial revenues may increase, even as prices remain stable or decline, due to increases in hospital utilization, patient volume, complexity of services, or other factors.”

Nonetheless, Connecticut’s health strategy office concluded based on its review of Northwell’s recent hospital takeovers in New York that “prior acquisitions by Northwell demonstrates significant increases in inpatient hospital prices and commercial revenue following the acquisition.”

Higher prices may not be a deal breaker, according to Connecticut’s health strategy office, which is the only agency standing between Northwell, Nuvance, and a new health-care system with 28 hospitals and 99,000 employees in New York and Connecticut. In addition to Danbury and Norwalk hospitals, Nuvance operates Sharon Hospital, New Milford Hospital and three hospitals in New York’s Hudson River Valley.

In the fall, New York’s Public Health and Health Planning Council signed off on the deal.

The impact report in Connecticut follows a public hearing in November when 20 speakers weighed in – all in favor of the merger.

“The affiliation should financially stabilize Nuvance’s hospitals and has the potential to keep certain service lines open that otherwise would close,” reads the state’s impact report. “Additionally, access and quality at Nuvance’s hospitals appear more likely to stay the same or improve if the affiliation with Northwell is effectuated. Northwell’s history of investments in previous acquisitions and its track record of recruiting health care professionals make us optimistic that Nuvance’s hospitals will similarly benefit.”

Nuvance’s healthy prospects under the affiliation are in dramatic contrast to its weak outlook without a savior.

Nuvance, which operates hospitals in Connecticut and New York’s Hudson River Valley, told the state health strategy office that it came out of the pandemic bleeding hundreds of millions of dollars in losses, and that it faces a shutdown of its facilities and potential bankruptcy without the affiliation.

Specifically, “Nuvance Health lost over $220 million during the last two fiscal years, and projects to lose nearly $150 million during its current fiscal year,” Nuvance reported to the state in 2024 as part of its application for affiliation with Northwell.

Nuvance’s woes come at a time when Connecticut’s hospitals as a group saw their losses drop and their revenues increase in fiscal 2023, even as labor and supply costs surged, according to an annual report by the same Connecticut Office of Health Strategy.

The single-most financially stressed Connecticut hospital in the state report was Nuvance’s Sharon Hospital, which has been cutting back maternity care and other services for years.

In August state Attorney General William Tong announced that in exchange for his approval of the affiliation deal with Northwell, Nuvance agreed to keep open Sharon’s maternity ward.

On Tuesday, the two health systems praised the progress made in Connecticut over the past year.

“We are pleased that our application to have Nuvance Health affiliate with Northwell Health is moving forward,” said Barbara Osborn, vice president of public relations for Northwell. “As confirmed in the (impact) report, we believe there are many positive factors to this planned affiliation allowing Nuvance hospitals to continue to focus on providing local access to high-quality, high-value health care for their patients and communities.”

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