Most Favor the Prospect
Forum attendees see financial advantages to selling hospital
By Michael C. Juliano
WATERBURY — Several individuals spoke in favor of Prospect Medical Holdings’s plan to buy Waterbury Health at a forum Wednesday night, while a few expressed concern over the deal.
GWHN, Waterbury Hospital’s parent, signed a letter of intent to “sell substantially all of its assets” to Prospect, a Los Angelesbased firm with 13 hospitals and 40 clinics in California, Rhode Island and Texas.
A few weeks ago, the health network filed a Certificate of Need letter of determination with the state Office of Health Care Access and the Office of the Attorney General, seeking approval to be bought by Prospect in a $100 million deal that would include $55 million in capital improvements.
Both parties conducted a hearing Thursday at the Courtyard by Marriott at 63 Grand St., marking the first step in the regulatory process. A transcript of the evening’s proceedings will be filed with both OHCA and the attorney general’s office.
“I am here this evening to express my strong support for the proposed transaction between Waterbury Hospital/ Waterbury Health and Prospect Medical Holdings,” Mayor Neil M. O’Leary said before about 50 attendees, including officials from Prospect, GWHN and local organizations.
Prospect represents the health network’s third attempt in three years to be acquired by a for-profit company as it faces fiscal challenges due to cuts to reimbursements in Medicare and Medicaid and a state hospital provider tax.
The health network tried unsuccessfully to enter into for-profit joint ventures with Dallas-based Tenet Healthcare Corp. in 2013 and 2014 and Plano, Texas-based LHP Hospital Group in 2012. Saint Mary’s Hospital, also in Waterbury, was involved in both those deals.
“First, let me state the obvious,” O’Leary said. “Here we are, once again, discussing the future of the health care system in our region. I am confident with this transaction, we can finally move forward.”
Prospect is the “right partner at the right time” for GWHN because it brings a wealth of information and expertise in how to “thrive in a new era of health care,” said Paul Pernerewski, president of Waterbury’s Board of Aldermen.
Prospect’s “Coordinated Regional Care” approach to health care makes the company the “right partner” for GWHN, said James Gatling, president of Waterburybased New Opportunities Inc.
The Waterbury Regional Chamber supports the proposed Prospect-GWHN deal because the hospital is one of the city’s largest employers and benefits the region’s economy, said David Krechevsky, the chamber’s public policy and economic development director.
There is concern that Prospect might use money placed in a nonprofit foundation after GWHN’s debts and liabilities are paid to fund indigent patients, said Dr. W. Scott Peterson, an ophthalmologist and co-founder of OptiCare.
Anne Zucker, GWHN’s lawyer, said a tax-exempt organization is prohibited from providing funds to a for-profit entity. OHCA and the attorney general’s office will send both parties a Certificate of Need application, if they determine the deal is a conversion to for profit. Prospect and GWHN will then have 60 days to complete the application.