State-owned UConn Health is bidding to purchase the beleaguered Waterbury Hospital for $13 million in cash and the assumption of $22 million in debts. The deal is expected to create a statewide health system led by UConn, Gov. Ned Lamont said Tuesday in Waterbury.
“The acquisition of Waterbury, and the future joint venture partnerships with Bristol and Day Kimball hospitals, represent the start of a new era at UConn Health,” Sean Scanlon, state comptroller, said in a statement.
“In addition to keeping these hospitals open and out of the hands of private equity, we're developing an alternative low-cost, high quality health system for Connecticut at a time when people are rightly fed up with the high cost of care,” he said.
In January, a U.S. Senate report blasted private-equity-funded Prospect Medical Holdings, owner of Waterbury Hospital, for saddling the hospital with debt after private inventors sold hospital land and drew down on profits.
Less than two years after the private equity firm Leonard Green & Partners (LGP) acquired Prospect in 2010, Prospect paid out $188 million in dividends to LGP’s investors, according to the report.
The report cited Connecticut Public’s reporting on staffing shortages at Waterbury Hospital. Connecticut Public also reported on patient abuse, rusty operating room equipment, and unpaid bills at Prospect-owned hospitals. Prospect, currently in bankruptcy court in Texas, said it put corrective actions in place after being cited by the state and has since passed subsequent state inspections.
As part of the deal, UConn Health will take on more than $20 million of the hospital’s debt. It will also invest nearly $400 million in hospital improvements following years of disrepair.
Connecticut’s legislature is scheduled to hold a special session this week to approve a bonding package to fund the investments.
