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Tenet Withdraws Plans To Purchase Connecticut Hospitals

by | Dec 11, 2014 6:50pm () Comments | Commenting has expired | Share
Posted to: Business, Health Care, Labor, Waterbury

Corutesy of Waterbury Hospital (Updated 8:55 p.m.) More than a week after regulators gave the thumbs up to Texas-based Tenet Corporation’s takeover of Waterbury Hospital, the private hospital chain announced it was abandoning plans to purchase Waterbury and four other Connecticut hospitals.

In a statement, Tenet said it respects the role of state regulators, “Nonetheless, the extensive list of proposed conditions to be imposed on the Waterbury Hospital transaction, which is only the first of four transactions for which we’ve made applications, 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. As a result, today we informed the Office of Health Care Access (OHCA) and the Attorney General that we are withdrawing our applications to acquire Waterbury Hospital, Saint Mary’s Hospital, Bristol Hospital and Eastern Connecticut Health Network.”

In a letter to Attorney General George Jepsen and Public Health Commissioner Jewel Mullen, Tenet Healthcare Corporation’s legal counsel Collin Baron expressed the gratitude for all the hard work that went into the negotiations.

“Tenet had hopes that its expertise and financial resources could ensure the long-term viability of the hospitals that it intended to acquire for the benefit of the communities they serve,” Baron wrote his letter. “Tenet regrets that this is no longer possible.”

Tom Swan, executive director of the Connecticut Citizens Action Group, said Tenet’s actions show “it was never serious about addressing the healthcare needs of the people of Connecticut.”

But he said having gone through the process the hospitals and Connecticut has learned they can work together to engage in a process that will help the hospitals survive and thrive in their communities.

Waterbury Hospital President and CEO Darlene Stromstad said the conditions being placed upon the Tenet purchase were “clearly one obstacle too many.”

Waterbury Hospital was the first of four applications Tenet had pending with the Office of Health Care Access and Jepsen. The others were Saint Mary’s Hospital in Waterbury, Bristol Hospital, and Eastern Connecticut Health Network, which operates Rockville General and Manchester Memorial Hospital.

Jepsen called the decision by Tenet “unfortunate.”

“Based on conversations my office has had subsequent to the release of our proposed final decision last week, I do not believe that the conditions proposed by my office — which focused on preserving and safeguarding the assets of the sale for healthcare purposes and not the day-to-day operation of the for-profit hospital going forward — were a contributing factor in Tenet’s decision,” Jepsen said. “This decision raises substantial and immediate questions about the future of healthcare delivery in some of our communities. Those questions deserve the closest attention of policymakers at the local and state levels.”

It’s unclear what will happen to the cash-strapped hospitals, which were depending on the capital the purchase would have provided.

Some of the conditions imposed by regulators were unacceptable to Tenet. The Office of Health Care Access imposed 47 conditions regarding hospital operations and Jepsen’s office imposed 21 regarding Waterbury Hospital’s charitable foundation.

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Comments

(5) Archived Comments

posted by: DrHunterSThompson | December 11, 2014  11:56pm

Overbearing regulations .......... and who is surprised?  the administration’s regulation reduction program of last session failed us.

HST

posted by: ocoandasoc | December 12, 2014  2:15am

It’s pretty clear who is running the State of Connecticut – the unions. They’ll look at this as a victory – but it could be a huge loss for the citizens of Connecticut.  The quality of healthcare in CT is already marginal, and the costs are higher than in almost any other state. Allowing the unions to pressure the lawmakers they have in their deep pockets to kill this deal through unrealistic regulatory demands will likely drive the quality even lower and the cost even higher.

posted by: GBear423 | December 12, 2014  8:08am

GBear423

Well that is so amazing, businesses outside of CT do not like State politicians and their bureaucracies making their business’s decisions…  and we thought CT was so business friendly.
I am wary of a single company buying up many hospitals, but it appears from the article that a few of these facilities may have to reduce services, staff, or even close. What is keeping these hospitals from being profitable?

posted by: UConnHoop | December 12, 2014  8:27am

When people who are in charge of making these decisions have absolutely no idea how businesses actually work, this is the result you get.  Where else in our country, outside of the People’s Republic of CT, do people who want to invest hundreds of millions of dollars are told they’re not welcome?

posted by: dano860 | December 12, 2014  10:06am

“Regulatory oversight,” do we infer from that comment that they could endure the Feds scrutiny and Obamacare but not the picky meddling of the State of CT?
This says it quite clearly, the State is not business friendly!
What now? They go out of business or the State subsidizes them?

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