State approves Johnson Memorial Hospital sale

St. Francis Hospital

Ctmirror.org file photo

St. Francis Hospital

State regulators have approved plans for the parent company of St. Francis Hospital and Medical Center in Hartford to acquire the financially struggling Johnson Memorial Hospital. The $30 million purchase is expected to be finalized by the end of the year.

The sale will make the 70-bed Stafford Springs hospital the second in Connecticut to become part of the national Catholic hospital chain Trinity Health. St. Francis became part of the organization earlier this year, and St. Mary’s Hospital in Waterbury is seeking regulatory approval to join Trinity as well.

Johnson Memorial has been affiliated with St. Francis’ parent company, St. Francis Care, since 2012. After the sale, it will remain an independently licensed hospital with its own board of directors.

Johnson Memorial has struggled financially for the past decade. It filed for bankruptcy twice and made several failed attempts at finding a partner. During the 2014 fiscal year, 71 percent of discharges were patients covered by government insurers — Medicare, Medicaid and the health care program that covers members of the military and their families, which generally pay less than private insurance or the cost of care.

The sale will end Johnson Memorial’s bankruptcy proceedings, and Trinity Health-New England – its new parent company – will assume its outstanding debt.

In approving the sale, the state Office of Health Care Access, which oversees hospital transactions, found that “Johnson’s future financial viability and its patient population’s access to community health services can be best achieved by maintaining and building upon the relationship and affiliation” with St. Francis’ health system.

According to the regulator’s decision, the deal is not expected to result in immediate changes to clinical services either hospital provides, and St. Francis will make investments in Johnson Memorial’s facilities, technological capabilities – including electronic medical records – and stability, as well as help the Stafford Springs hospital attract and retain doctors.

“This alliance preserves a critical community asset, allowing us to continue providing health care to the community, as well as serving as a significant contributor to the local economy,” Johnson Memorial Hospital President and CEO Stuart E. Rosenberg said in a statement. “As part of Trinity Health – New England, our employees and patients can be assured of continued access to the hospital’s 103-year legacy of providing uninterrupted health care services.”

 

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