Prospect Medical Holdings, a California-based company, is trying to sell its three Connecticut hospitals to Yale New Haven Health. The deal was agreed upon a year ago — so what’s the hold up?
WSHU’s Ebong Udoma spoke with CT Mirror’s Dave Altimari to discuss his article written with Jenna Carlesso, “Prospect-YNHH deal nearing 1 year of waiting for CT approval,” as part of the collaborative podcast Long Story Short.
You can read their story here.
WSHU: Hello, Dave. You say in your story that Prospect Medical Holdings, which is a for-profit company that owns three major medical facilities in Connecticut — Waterbury, Manchester and Rockville General hospitals — they’re in the process of selling their hospitals to Yale New Haven Health. Why is it taking so long for the state’s Office of Health Strategy to sign off on the deal?
DA: That’s the question that a lot of state legislators are asking. This deal is exactly a year old, as a matter of fact, today as we speak. Jenna and I took a look at some other certificate of need applications for hospital sales over the past five or so years. And this one is certainly taking longer than some of the other ones. Now the state’s answer to that is this is a complex deal. It’s three hospitals and not one. It’s a for-profit selling to a nonprofit. And then you throw in the cyberattack, the six-week cyberattack that really crippled these three hospitals, and you have what they say is a difficult case that they’re still reviewing.
WSHU: So where do we go from here? I mean, is this deal still in the works? Is it going to happen? Because I understand that healthcare professionals are very worried that this deal might be derailed.
DA: Yes, several of them held a press conference last week at the Capitol. Health care providers from Waterbury, Manchester and the Eastern Connecticut Health Network, which includes Rockville General, and they’re very concerned that Prospect is not paying vendors. As far as we know, they owe at least $40 million to their vendors. Many of those are like doctors, anesthesiology services, radiology services. And there is a big concern amongst the health care providers that while the state is reviewing this application that one of these hospitals could actually close.
WSHU: Right now some of the services have been cut back, some of the surgeries and other normal things that they do in the hospitals have been cut back on, right?
DA: They’ve cut back on some surgeries, because they don’t have the supplies. They owe money to traveling nurses and traveling doctors, which a lot of hospitals now use. They owe them quite a bit of money. They’ve talked about pulling out which would really impact the number of people working in hospitals, there’s a dire picture being painted by the people who work in these hospitals as to where they are right now. And part of that, to be fair, is the aftermath of the cyberattack.
WSHU: Just tell us a little bit about the cyberattack. We’ve talked about it in past Long Story Short episodes, but can you just remind us what happened over the summer with the cyberattack on these hospitals?
DA: Sure, it was about a six or seven week period starting in the beginning of August, where all three of the hospitals, Waterbury, Manchester and Rockville, basically lost all their ability to use computers. That means everything from payroll to bills to more importantly stuff like reading cardiac monitors or reading X-rays. So it set them back quite a bit.
The emergency rooms in eastern Connecticut at two hospitals had to divert ambulances from their emergency rooms, they couldn’t handle the amount of people. That same thing in Waterbury, where everybody ended up going to St. Mary’s, forcing people to wait 8 to 9 hours in their emergency room, because there was nowhere else to go. The after effect of it is that they’re behind on billing, because they didn’t have the ability to bill. And they’re way behind on some of their payments to vendors. And some of that was going on pre-cyberattack. And the cyberattack only exasperated the situation.
WSHU: State Senator Saud Anwar (D-East Hartford) is the chair of the Public Health Committee. He’s also an emergency care doctor. And he has been affected by this. What is he saying? What is his take on this and how it should be dealt with?
DA: Well, I think what’s going to happen going forward is that there’s no question the legislature will be taking a look at the whole certificate of need process. And does there need to be changes made to how it’s done or not done? Should there be statutory time limits to getting these deals approved? So that’s all going to come up, I believe in the next legislative session. That’s down the road. I think in the short-term, the concern is just getting this deal approved. And Senator Anwar has been pretty vocal about the need for this sale to go through so that Yale New Haven can come in and take over these hospitals.
WSHU: In the meantime, what’s the state saying?
DA: At the moment, not much. They actually wanted and got a confidentiality agreement with Yale and Prospect. So there’s been very little about what’s going on with negotiations over the last say, month or so I believe. The governor met with a bunch of legislators and also met with some of the hospital officials and then the hospital officials met with some legislators. And after that, we haven’t heard very much about what’s going on between the three sides trying to work out a deal. We do know Yale has told the governor that they feel that they need the state to contribute $80 million to help recover from the cyberattack, which Lamont wasn’t very enthusiastic about, I guess would be the way to put it.
WSHU: He does not seem interested in spending state money right now.
DA: He doesn’t feel that the state should be helping a for-profit company, as Prospect is. Yale has said that the deal that they signed, which was I believe, $435 million, the hospitals are not worth that, especially if you add in all the debt that they’ve accumulated in the last six months or so. They want to negotiate it down, but Prospect hasn’t shown any indication they want to do that. And so we’re kind of at a standstill, it seems like, and in the meantime, you have all these health care providers saying they are getting dangerously close to one of these hospitals closing.
WSHU: So we don’t have an answer right now.
DA: We are waiting for OHS, the Office of Health Strategies, to make a decision. They have asked the attorney general to review this marketing report. I don’t think there’s an imminent announcement coming. But health care providers that we’ve talked to, and some mayors that we’ve talked to, said if we don’t get this figured out by the end of the year, were very concerned about what’s going to happen with these hospitals.
WSHU: Wow. In the meantime, there’s dire need for health care in eastern Connecticut right now.
DA: Well, if you look at what happened here, there’s only I mean, there’s two hospitals in eastern Connecticut if you live in Tolland, or Vernon or Andover and you can’t go to the emergency room at Rockville or Manchester, either you’re either going to Hartford, or in some cases, they were taking people into Massachusetts, according to some of the records that we saw. So for those hospitals to close would be a number of people who would be impacted in eastern Connecticut. Massive.