The Connecticut Office of Health Strategy on Friday evening approved a $13 million deal for the state’s flagship medical institution — the University of Connecticut Health Center — to purchase Waterbury Hospital, one of three struggling hospitals owned by bankrupt hospital operator Prospect Medical Holdings.
The approval marks yet another step towards concluding a lengthy search to find buyers for Prospect’s Connecticut hospitals — a process that often seemed on the brink of failure.
Last month, officials approved Hartford HealthCare’s takeover of Prospect’s two other Connecticut hospitals, Manchester Memorial and Rockville General. The deal officially took effect Jan. 1.
“I’m confident we’re moving toward a much stronger and brighter future for the facilities owned by Prospect,” said Gov. Ned Lamont in a statement. “UConn Health has shown real leadership by stepping up and prioritizing the health care needs of the Greater Waterbury community.”
Spokespeople for Prospect Medical Holdings and UConn Health did not immediately respond to a request for comment.
The decision issued by OHS noted that UConn Health was the only bidder for Waterbury Hospital in the bankruptcy court-run auction, and that the hospital would likely close if the agency denied the transaction.
In 2022, Prospect signed a deal to sell its three Connecticut hospitals — Manchester Memorial, Rockville General and Waterbury — to Yale New Haven Health for $435 million. But the deal was mired in setbacks and litigation.
In August 2023, a cyberattack crippled operations at Prospect’s facilities around the country. In 2024, Yale New Haven Health and Prospect Medical sued and countersued each other over the true value of the hospitals. In January 2025, Prospect filed for bankruptcy and, by the following month, Yale officials said a deal appeared “impossible.”
In September, Yale agreed to pay $45 million to Prospect to end all disputes over the hospitals’ sale.
Over the years the Yale deal was pending, Lamont and OHS received broad criticism for the lengthy approval process. That led state legislators to approve a measure last year that allows for an expedited timeline for the acquisition of hospitals that have filed for bankruptcy.
The approval of UConn Health’s acquisition of Waterbury Hospital marks the second deal reviewed under the expedited “emergency certificate of need” process, which requires the state to issue a decision within 60 days of when the application is deemed complete. Hartford HealthCare’s purchase of Manchester Memorial and Rockville General was the first.
OHS imposed certain conditions on the approval. UConn Health must maintain all services for a minimum of three years, including women’s health and reproductive services.
In addition to spending $13 million to purchase the hospital, UConn Health also plans to invest $250 million into Waterbury Hospital “and its affiliates and subsidiaries” in the five years after the acquisition.
During a special legislative session in November, Connecticut lawmakers approved $390 million in bonding to support the capital improvements. The debt will be added to the “UConn 2000” bonding package, the state’s financing program for capital projects at the University of Connecticut.