Hartford HealthCare, one of the two largest health systems in Connecticut, has offered $86.1 million to purchase Manchester Memorial and Rockville General hospitals from Prospect Medical Holdings, the California-based operator that filed for bankruptcy protection in January.
ECHN Holdings Inc., a wholly owned subsidiary of Hartford HealthCare, will serve as the “stalking horse bidder” for the two hospitals in the court-supervised sale auction, according to court documents. The “stalking horse” serves as the first bidder in a bankruptcy auction whose offer serves as the minimum bid.
Other bidders may submit offers through Oct. 16. A sale hearing, where the bankruptcy court judge will approve the preferred offer, is scheduled for Oct. 24.
Prospect Medical Holdings paid $105 million when it purchased the two hospitals in 2016.
Tina Varona, a spokesperson for Hartford HealthCare, said in an emailed statement that the health system is “excited to explore this opportunity” and “uniquely qualified to transform healthcare for the better in these communities.”
“We have the capability to stabilize and expand the workforce at these hospitals, provide support to enhance quality and safety, and advance strategic investments in people, programs, technologies, facilities, and community partners,” Varona wrote. “Given Prospect’s restructuring proceedings, this is a complex process that will unfold over the coming weeks.”
Deborah Weymouth, president and CEO of Eastern Connecticut Health Network and Waterbury Health, called the bid an “important step” in the sale process.
“We are proud of the exceptional care we provide daily and equally excited about the promise of our future,” Weymouth wrote in an emailed statement on Friday. “Achieving this milestone demonstrates the value that we continue to contribute to our communities and brings us closer to starting a new chapter.”
Rob Blanchard, a spokesperson for Gov. Ned Lamont, said the governor has been focused on ensuring the facilities “transfer to new sustainable long-term operators that will benefit the communities they serve and their incredible staff.” The administration is “very encouraged that Hartford HealthCare has stepped up to help provide continuity of care in the region,” he added.
If Hartford HealthCare prevails in the sale auction, the deal will have to go through the state approval process, known as “certificate of need,” which is overseen by the Office of Health Strategy. OHS and the Lamont administration faced criticism over the time required to approve a failed $435 million deal signed in 2022 for Yale New Haven Health to acquire the three Prospect-owned hospitals.
During the most recent legislative session, lawmakers passed a measure that allows for an expedited timeline for the acquisition of hospitals that have filed for bankruptcy. Under the emergency certificate of need timeline, OHS must issue a final decision within 60 days from when the application is deemed complete.
The acquisition would further expand the footprint of one of Connecticut’s largest health systems.
Hartford HealthCare currently owns a total of seven hospitals across the state, the most of any health system in Connecticut, and earned roughly $6 billion in revenue in 2023. By comparison, Yale New Haven Health had higher revenue in 2023, $6.4 billion, but only owns four hospitals.
The bid announcement marks the latest ownership development, after months of silence, for Prospect’s three hospitals in Connecticut — Manchester Memorial, Rockville General and Waterbury Hospital
Earlier this week, the state-owned University of Connecticut Health Center announced that it would submit a bid to acquire Waterbury Hospital. The move is part of a broader strategy by Connecticut’s only public academic medical center to expand its footprint. UConn is also seeking to acquire Bristol and Day Kimball Hospitals as part of that deal.
[RELATED: CT in talks to buy Bristol, Day Kimball and Waterbury Hospitals]
“We are working with multiple parties that are interested in acquiring Waterbury HEALTH and we expect to advance a stalking horse bid on this portion of our Connecticut operations shortly,” Weymouth, the CEO, stated in emailed comments.
Sen. Saud Anwar, D-South Windsor, who works as a physician at Manchester Memorial and serves as the co-chair of the state legislature’s Public Health Committee, welcomed the announcement, calling it an opportunity to “reduce private equity’s presence in state healthcare.”
“This is incredibly welcome news for health care in the state of Connecticut. I fully endorse and encourage Hartford HealthCare’s bid to purchase these hospitals, which would preserve local community care in Manchester, Vernon and their surrounding towns and cities,” Anwar wrote in a statement released on Friday.
Vernon mayor Dan Champagne said Hartford HealthCare’s offer brings “new hope” to the community.
“For years we have been working hard to secure Rockville Hospital’s future and this is a major step towards that,” he said.
CT Mirror reporter Dave Altimari contributed to this report.
