Yale wants USD 80M from state to acquire 3 Connecticut hospitals

Yale New Haven Health executives want the state to provide $16 million per year for five years, or $80 million total, to help support their acquisition of three Connecticut hospitals that recently were hit with a cyberattack, sources with knowledge of the request told The Connecticut Mirror Monday.

Yale officials have acknowledged they are seeking financial assistance from the state, and they’ve asked Prospect Medical Holdings, which owns the three hospitals — Waterbury, Manchester Memorial and Rockville General — to lower the $435 million purchase price. They have not disclosed how much money they are requesting.

Spokespeople for Yale and Prospect Medical Holdings did not return calls seeking comment Monday. Gov. Ned Lamont has not said whether the state would contribute taxpayer money toward the deal.

“This is a deal between two private parties with substantial resources to bring to bear. The governor is focused on investing tax dollars in initiatives that will provide economic opportunity for all Connecticut residents, in areas such as housing, education, and child care,” Julia Bergman, deputy communications director for Lamont said in a statement Monday. “In the meantime, the Office of Health Strategy will continue to move towards a resolution in a careful but expeditious manner, and our department of public health will continue to ensure patient health and safety is maintained.”

Yale and officials from Waterbury Hospital and Eastern Connecticut Health Network — which operates Rockville and Manchester hospitals — are urging the state to speed up its approval of the acquisition, saying the financial situation at the Prospect-owned facilities is dire.

Yale announced in 2022 that it had agreed to purchase the hospitals, along with imaging equipment and the hospitals’ equity interests in certain joint ventures. Completion of the sale and a certificate of need are pending.

Lamont has said he expects talks between state and hospital officials to begin as early as this week. Part of the discussion could involve speeding up the certificate of need process.

About 12 lawmakers from communities near the Prospect-owned hospitals met with Lamont on Monday to share their concerns about conditions at the facilities.

House Majority Leader Jason Rojas, D-East Hartford, said he asked the governor’s office to update legislators from Manchester and Waterbury about the sale because their cities and towns would be most impacted.

“Yale has made a request for … a recovery plan, so it’s certainly possible they could seek state funding, and that’s a public policy question we’d have to discuss once we have determined where things are with this transaction between two private institutions,” Rojas said. “I’m concerned about patient safety, all of the people who work in these hospitals and the impact on our communities.”

“The fear we have is that the service lines are going to stop functioning — anesthesia, cardiology, pulmonary, different stress tests and outpatient services — all of those things would start to get impacted because the personnel may not be there,” said Sen. Saud Anwar, D-South Windsor, a co-chair of the Public Health Committee and a physician under contract at Manchester Memorial. “We need to have this deal done.”

Some legislators said they came away from the meeting feeling optimistic.

“Folks are working on a resolution to solve some of the outstanding issues,” said Rep. Jeff Currey, D-East Hartford. “The process is going to play out, but all arrows seem to be pointing in the same direction to get the deal done.”

“It was a productive meeting, and we were able to share our concerns,” added Rep. Jason Doucette, D-Manchester. “It is clear to me from the meeting today that this issue has the governor’s full attention, and for that, I am grateful.”

ECHN owes $42 million in taxes to the state, $5.18 million to physicians, and $5.9 million to local vendors, sources said Monday. A spokeswoman for ECHN did not return a call seeking comment.

Hospital officials with Waterbury and ECHN have described their financial situation as dire. In a meeting with about 30 legislators late last month, the executives said they are struggling to pay bills and, if the deal with Yale New Haven is not approved, the facilities may not remain financially viable or functional, according to people in attendance.

The executives have said they are behind on paying vendors and physicians contracted to provide care at the hospitals.

Yale New Haven Health officials are concerned about the software at the Prospect-owned hospitals following the cyberattack, which began in early August and lasted for nearly six weeks. At the meeting with legislators, the computer system used by the hospitals was described as outdated.

More than 24,000 employees of Prospect Medical Holdings in Connecticut may have had some of their personal information, including Social Security numbers, exposed during the recent cyberattack that paralyzed many operations in the hospitals.

Prospect notified employees and the state Attorney General’s office of the breach in late September.

Prospect also told the Attorney General’s office that 63 Connecticut residents who were patients at Prospect hospitals in California may have had their information breached, including patient names, health insurance and financial information. Of those breaches, 13 had Social Security numbers involved, according to the Attorney General’s office.

Yale officials said earlier this month that they have proposed a recovery plan for the Prospect-owned hospitals, but they are seeking state funding and a lower purchase price.

“Two weeks ago, in light of the cyberattack at the Waterbury Health and [Eastern Connecticut Health Network] hospitals and the deteriorating conditions at those hospitals, Yale New Haven Health proposed a recovery plan in which Yale New Haven would provide immediate management support to WH and ECHN to help them recover from the cyberattack, and Prospect would adjust the purchase price and the state would provide financial support to the WH and ECHN hospitals to account for their deteriorating conditions,” Dana Marnane, a spokeswoman for Yale New Haven Health, said in a statement.

“We need all parties, including the state, to join in the recovery plan to make this transaction happen.”

The state has given money to hospitals in the past.

Last year, it provided financial assistance to both Bristol Hospital and Day Kimball Hospital in Putnam. The state agreed to give Bristol Hospital a total of $7 million over three years, starting with $2.5 million during the current fiscal year.

Day Kimball will receive $10 million over the next two years — $8 million of that by June 30. CT Mirror