Two Connecticut regulators have approved Prospect Medical Holdings' proposed purchase of the Greater Waterbury (Conn.) Health Network, paving the way for the not-for-profit hospital to become a for-profit provider.
In separate decisions on Friday, Connecticut's attorney general and Department of Public Health both signed off on the $43.3 million deal that will transfer virtually all of Greater Waterbury Health Network's assets to Los Angeles-based Prospect Medical Holdings.
Greater Waterbury Health, which owns Waterbury Hospital, has struggled financially for over a decade and incurred five consecutive years of financial losses starting in 2006. It sought buyers in the past, but deals with LHP Hospital Group and Vanguard Health Systems fell apart in 2012 and 2013, respectively. Another deal with Tenet Healthcare Corp. failed in 2014, after the attorney general and the state's Office of Health Care Access placed several conditions on the transaction.
“The difficulties faced by hospitals in delivering quality healthcare services in a changing and increasingly challenging fiscal landscape have become, appropriately, a subject of national concern and debate,” the Connecticut attorney general's office said in its decision. “A number of forces in recent years have contributed to the financial challenges to local hospitals, including those in Connecticut.”
Under the terms of the regulatory approvals, Prospect Medical will transfer all of Greater Waterbury Health's charitable assets to an independent foundation, and it will continue to follow Waterbury's policies for charitable and indigent care for at least five years.
Prospect has a successful track record of turning around financially challenged hospitals like Waterbury Hospital, the company said in a statement.
Prospect currently owns and operates 18 hospitals, as well as 140 clinics and outpatient centers. The company is also acquiring a two-hospital system in Manchester and Rockville, Conn.