The sale of three hospitals in Connecticut has been held up by the effects of a cyberattack. Now the state, Yale New Haven Hospital and Prospect Medical Holdings are in a race to close the deal before the three hospitals are too far gone.
WSHU’s Ebong Udoma spoke with CT Mirror’s Katy Golvala to discuss her article, “In 2016, Rockville was a bustling local hospital. Then Prospect Medical took over,” as part of the collaborative podcast Long Story Short.
WSHU: Hello, Katy. Can you tell us about the hospitals in the Eastern Connecticut Health Network and how were they faring before Prospect Medical, which is a national chain, took them over in 2016?
KG: Yeah so in 2016, Prospect took over a few ECHN hospitals, which are Manchester, Rockville and Waterbury hospital. They were definitely facing some financial challenges. They had a CEO at the time that mentioned pension and other debt, increasing tax expenses. ECHN had laid off about 200 employees in the past two years. But the hospitals were still offering services.
WSHU: So they were full service hospitals, they had inpatients and outpatients and emergency services.
KG: That's right. And they were definitely facing their share of challenges. And the hope was that Prospect would come in and stabilize the health system.
WSHU: Prospect promised to spend quite a bit of money, trying to upgrade the hospitals. What happened?
KG: That's right, they pledged to spend $75 million between Manchester and Rockville. And, you know, one part of the story is that Eastern Connecticut Health Network didn't respond to specific questions that we asked about, for example, did that investment ever happen? What kind of services do you offer now? We sent those kinds of detailed questions. And as a response, we got a very general statement. So we don't actually know what came of that $75 million investment.
WSHU: The big inflection point here was COVID. But before COVID, where were the hospitals generally? Because I understand from your story that there were quite a number of layoffs in different departments even before COVID.
KG: Yeah, that's right. So in 2016, the then CEO of Prospect mentioned that there had been about 200 people laid off between the two hospitals. By that time, once Prospect took over, things seemed pretty stable. I think the employees had issues with the new management for sure. Rockville employees in particular felt that in some ways, new management prioritized Manchester over Rockville by moving certain services like ambulatory care over to Manchester, but like you said, in terms of the service cuts, Rockville things really started to go downhill with COVID.
WSHU: Can you tell me exactly what happened? When COVID happened, waivers were given to allow certain procedures to be suspended, right?
KG: That's right. So Gov. Ned Lamont (D) signed a waiver in March. Typically the state government has an approval process called the certificate of need, it takes a long time to apply and get approval to cut services. But he said in this case, if you're going to cut services in order to make more room for COVID patients, just tell us you're doing it and we will basically give you permission. So Rockville applied for that permission on March 24, I believe and received permission to cut surgical services for the purposes of treating more COVID patients the following day.
WSHU: And what happened after that? It seems as if total inpatient care just went to zero. I see from the graph you have here that in 2021, there were hardly any inpatients In Rockville, and in 2022, they had a few more, but what exactly is the situation? Have they gone back to having operations at the hospital and have inpatient services?
KG: So what we heard from employees, lawmakers and union leaders is that the hospital basically told the state that as of May 2022, the services that they stopped for the sake of COVID had been brought back. But according to the people that we talked to in our reporting, there were several major changes to those services. So the hospital actually never restarted inpatient surgical services. And they also never never reopened their intensive care unit. Now they have a unit that's known as a progressive care unit that offers care to critical patients in critical condition, but those in the most critical condition now get transferred over to Manchester.
WSHU: Now what's happening here at this time is that Prospect is trying to sell the three hospitals. They're in the process of selling them to Yale New Haven, and Yale New Haven seems to be dragging its feet about the deal. What's going on there? And is the state's interest in keeping the services available in Eastern Connecticut?
KG: So right now, Prospect and Yale New Haven signed a deal to sell the hospitals, Rockville, Manchester and Waterbury to Yale New Haven. I wouldn't say that Yale New Haven is dragging their feet. What seems like happened is, that after the cyberattack in August that crippled many Prospect Hospitals around the country, Yale New Haven basically said, 'we want certain things in order to actually go through this deal.'
One of those things is they want $80 million in state funding over five years. And they also want Prospect to reduce the purchase price, which right now is $435 million for the three hospitals as well as some other smaller medical organizations. And as of now, Gov. Lamont and the state Office of Health Strategy is working with Yale New Haven and Prospect to come up with a deal. But as of now, Lamont has said that he does not believe that taxpayer money should be used to chip in on the deal. But he does hope that Yale New Haven and Prospect can come to an agreement.
WSHU: When Prospect was running those hospitals, there was a real estate deal that was done, the properties were bought, by a real estate company, and then leased back to Prospect?
KG: That's right. So Prospect sold its hospitals in Connecticut, as well as the ones that it owns in California and Pennsylvania to a company called Medical Properties Trust. They're one of the biggest hospital landlords in the country. So what they do is they own health care facilities, hospital buildings, and the hospitals pay them rent. So for that deal, we don't know how much Connecticut hospitals pay in rent. But CBS News reported that that deal, at least, put a Pennsylvania network on the hook for $35 million a year in rent.
WSHU: And that might be also part of what's going on here with Yale New Haven, taking over the hospital chain, because I don't know if I should use the term dragging their feet. But Yale New Haven seems to be very hesitant about concluding this deal. And without state help, in some form, it doesn't seem as if it will go through.
KG: Yeah, I would probably hesitate to use the term dragging its feet because Yale New Haven has been very open about what it needs in order for the deal to move forward. Whether or not they're going to get those demands met, I think is what officials at the state and hospitals are figuring out right now.
WSHU: For the residents of Eastern Connecticut who use these facilities, any hope that they'll still have those facilities, that the deal would eventually go through and they'll be able to preserve the hospital network?
KG: I think there is hope because those talks are still going on, which means that they're still trying to reach a deal. But the CEOs of Waterbury, Manchester and Rockville went to the governor and basically said that if this deal doesn't go through, all of these hospitals might have to close because their financial situation is so dire. So I think there is hope and that the talks are still ongoing, meaning that a deal could still be reached, but it is not a good situation.
