Connecticut’s second-largest health system was named the successful bidder in an auction to acquire Manchester Memorial and Rockville General, two Connecticut hospitals owned by bankrupt hospital operator Prospect Medical Holdings, according to court documents filed Saturday.
Prospect Medical Holdings filed for bankruptcy protection in January, and the sale of its hospitals around the country is being overseen by the U.S. Bankruptcy Court in Northern Texas.
Last month, ECHN Holdings Inc., a wholly owned subsidiary of Hartford HealthCare, submitted an $86.1 million bid for the two hospitals. Prospect did not receive any additional bids for the hospitals, court records show. The company originally paid $105 million when it purchased the two facilities in 2016.
Tina Varona, a spokesperson for Hartford HealthCare, said the health system looks forward to the “opportunity 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.”
“Every hospital that has joined Hartford HealthCare has experienced measurable positive results that benefit patients — including across-the-board top safety ratings, improved access to care close to home, leading-edge technology and the recruitment of world-class clinicians,” Varona wrote in an emailed statement.
Prospect Medical Holdings did not respond to a request for comment.
The deal still needs to obtain state approval, known as the “certificate of need,” 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.
That deal also became mired in legal disputes, with Yale New Haven and Prospect suing and countersuing each other over the true value of the hospitals. The parties recently settled, with Yale New Haven agreeing to pay Prospect $45 million to exit the deal and end all pending litigation.
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, Boyd Jackson, OHS’s director of legislation and regulation, said in an emailed statement.
The acquisition of Manchester Memorial and Rockville General would further expand the footprint of one of Connecticut’s largest health systems.
Hartford HealthCare currently owns 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 owns only four hospitals.
The announcement of Hartford HealthCare’s success marks the latest ownership development for Prospect’s three hospitals in Connecticut — Manchester Memorial, Rockville General and Waterbury Hospital.
The state plans to acquire Waterbury Hospital as part of a broader plan to expand its own struggling flagship medical institution, UConn Health. The state is also in talks to acquire two independent hospitals, Day Kimball Hospital in Putnam and Bristol Hospital.
Officials hope the acquisitions will help boost the competitiveness of UConn Health in the world of academic medical institutions, as well as push the health system towards the ultimate goal of achieving financial sustainability for its clinical operations, so that it no longer has to rely on support from the state.
The state is also seeking to borrow $390 million to fund the expansion project. The funding would primarily go towards capital improvement projects at all three hospitals, though it would also support the acquisition of Waterbury Hospital, state Comptroller Sean Scanlon said in a previous interview with the CT Mirror.
On Oct. 3, the University of Connecticut’s Board of Trustees and the UConn Health Board of Directors voted to approve a $13 million bid to acquire Waterbury Hospital. However, the health system had not submitted an offer as of Oct. 20.
This story was originally published in the Connecticut Mirror.
