OP-ED | Collapse Of The Tenet Deal An Ominous Sign
The apparent collapse of a deal allowing a for-profit company to buy five hospitals in Connecticut could deal a devastating blow to the patients who depend on those facilities — and to the healthcare access of hundreds of thousands across the state.
Cries of “regulatory abuse” and “duplicity” are being heard as the Dallas-based Tenet Corporation backed out of a deal to buy the facilities, two of which are in Waterbury. So in addition to the Brass City, patients in Vernon and Bristol are left wondering whether their local hospitals will be around much longer. Also affected are patients of Eastern Connecticut Health Network, which operates the Rockville General and Manchester Memorial hospitals.
Tenet’s Dec. 11 letter to Attorney General George Jepsen and the state Office of Healthcare Access (OHCA) said nothing about the reasons for the company’s withdrawal but a statement posted on Tenet’s website cited an “extensive list of proposed conditions to be imposed on the Waterbury Hospital transaction, which . . . has led us to conclude that the approach to regulatory oversight in Connecticut would not enable Tenet to operate the hospitals successfully for the benefit of all stakeholders.”
Translation: the regulatory burden this crummy little state wants to impose on us wouldn’t be worth our time and money. And it certainly won’t satisfy our investors who would, after all, be providing the resources these hospitals so desperately need to remain viable and competitive.
The decision came only 10 days after OHCA had proposed 47 restrictions on hospital operations. Earlier, Jepsen’s office imposed 21 more restrictions regarding Waterbury Hospital’s future charitable foundation, which would be funded with proceeds from the sale.
As a condition of Tenet’s acquisition of the nonprofit Waterbury Hospital with partner Yale New Haven Hospital, OCHA had proposed setting tough restrictions on staffing, services and pricing. Those are not exactly the kinds of words private business leaders like to hear.
So who’s happy with this decision? Labor unions and some on the far left who believe — mistakenly, I think — that it’s impossible to deliver quality for-profit healthcare at a fair price. With some justification, the unions are convinced that a for-profit company would be less friendly to organized labor.
But would the unions be happy if some of these hospitals simply folded and gave pink slips to all the workers? I realize that sometimes management will bluster about mass layoffs in order to get concessions from labor, but in this case the threat appears real.
For the eighth time in the last 10 years, Greater Waterbury Health Network, the parent organization of Waterbury Hospital, has reported a fiscal-year deficit. Last fiscal year, the organization lost more than $6 million. That was preceded by a surplus of $2.2 million in fiscal 2012, but deficits were reported in each of the six previous fiscal years.
The reason, hospital analysts say, is lower rates of reimbursement for Medicare and Medicaid, shorter hospital stays, and more patients seeking outpatient care at specialty clinics.
But perhaps an even bigger problem is poor access to capital, which can adversely affect a hospital’s competitiveness. Unless it’s a relatively large facility or one affiliated with a wealthy institution such as Yale, your average hospital is poorly positioned to raise the kinds of funds necessary to renovate its buildings to modern medical standards and purchase the kind of expensive diagnostic equipment needed to compete.
So we are left with for-profit corporations. Sharon Hospital is currently the only for-profit hospital in the state. When it was acquired by investor-owned Essent Healthcare in 2002, Sharon had lost $16 million in the six years leading up to the sale. Sharon was clearly in danger of closing.
I use Sharon Hospital regularly and I can tell you it’s not perfect. But since the acquisition, Essent invested $40 million in new facilities and procedures, retired the previous nonprofit’s $11.4 million debt, expanded services, turned a 5-percent profit, and now pays $1.4 million annually in taxes to the town of Sharon.
So here’s the deal. If you’re a staunch union member — or a member of the far left — who thinks for-profit companies can’t be trusted with your health, be prepared to wait longer for nonprofit care or to travel farther to find it.
And you will have only yourselves — and the state’s oppressive regulatory regime — to thank for it.
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