Healthcare Business News

Hospital conversion bill advances in Connecticut

By Rachel Landen
Posted: March 26, 2014 - 7:30 pm ET

A bill that would prohibit not-for-profit hospitals from converting to for-profits moved ahead in the Connecticut Legislature this week.

The bill, which cleared the Joint Committee on Public Health on Tuesday in a 16 to 9 vote, would add new regulatory requirements affecting ownership changes of not-for-profit hospitals and make state bond money available as grants for hospital capital improvements. But the most controversial part of the bill is its restriction on converting to for-profit status after Oct. 1. It's a move that Sen. Majority Leader Martin Looney (D-New Haven), who co-sponsored the bill, says is “on the right track.

Advertisement | View Media Kit


“We should not allow additional for-profit hospitals into our state until we have all of the information on all of the various entities that are bidding to make profits from the healthcare needs of our citizens,” Looney told the committee last week.

Earlier this month, for-profit Tenet Healthcare Corp. announced a partnership with not-for-profit Yale New Haven (Conn.) Health System. The two systems are involved in discussions that could result in deals with four of the state's not-for-profit hospitals-Waterbury (Conn.) Hospital; Bristol (Conn.) Hospital; Rockville General Hospital, Vernon, Conn.; and Manchester (Conn.) Memorial Hospital.

“For many hospitals in the state, as well as the nation, the current not-for-profit model is simply no longer viable,” Tenet's Senior Vice President of Development Trip Pilgrim told the committee. “With state and federal funds being cut, and the implementation of the Affordable Care Act, the healthcare industry is drastically changing, and hospitals need to adapt. An attractive solution for some hospitals is entering into innovative and strategic partnerships with for-profit institutions.”

In his statement, Pilgrim acknowledged layoffs at Connecticut hospitals in 2013, but blamed the current not-for-profit model. Last year, Connecticut hospitals cut more than 1,400 jobs as the result of a drop in Medicare and state funding and a change in the state's hospital tax policy that contributed to a $175 million decline in operating income.

Follow Rachel Landen on Twitter: @MHrlanden

What do you think?

Share your opinion. Send a letter to the Editor or Post a comment below.

Post a comment

Loading Comments Loading comments...



Switch to the new Modern Healthcare Daily News app

For the best experience of on your iPad, switch to the new Modern Healthcare app — it's optimized for your device but there is no need to download.