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Conn. nonprofit system says things are ‘dire’


Rather quaint-looking Rockville General Hospital, in Vernon, Conn.

Eastern Connecticut Health Network, the nonprofit  that runs Connecticut’s Manchester Memorial and Rockville General hospitals, says that increasing taxes, debt and regulations are drowning it.

“I can’t express enough the dire situation we are in,” Eastern Connecticut Health Network President and CEO Peter J. Karl told state hearing officers.

But Los Angeles-based Prospect Medical Holdings has proposed to buy ECHN’s assets for $105 million. The state Office of Health Care Access and the attorney general’s office will decide  whether to approve the  proposed sale in June. ECHN leaders voted for the sale last year as a way to survive as a community healthcare provider.

The Hartford Courant noted that  Prospect owns hospitals in California, Texas and Rhode Island and seeks to buy the eastern Connecticut hospitals and Waterbury Hospital, in the south-central part of the Nutmeg State. Those same hospitals and two others had agreed to merge with Texas-based Tenet Healthcare but the deal fell apart in 2014 after Tenet rejected state regulators’ proposed conditions.

Chris Powell: The great Conn. hospital crisis, continued

Who will take the blame for the reduction in services, staff and payroll at Connecticut’s financially stressed nonprofit hospitals?

That’s the question behind the renewed dance of the  administration of Gov. Dannel Malloy and Tenet Healthcare Corp., the hospital chain that proposed to acquire Waterbury’s two hospitals and hospitals in Bristol, Manchester and Vernon but withdrew in the face of onerous conditions imposed by the state Office of Healthcare Access. Those conditions would have prevented Tenet from changing anything substantial at the hospitals for five years, making it impossible for the new owner to earn a profit.

In a letter sent this week to Tenet’s CEO, Governor Malloy sought to revive the company’s bid for the Waterbury hospitals as a step toward reviving the bid for the others too. “We can find a settlement that will be beneficial to your company as well as the state, Waterbury residents, and the Waterbury hospitals,“ the governor wrote.

So if the governor really wants the hospital acquisitions to happen, why did the Office of Healthcare Access obstruct them so? After all, that office is part of governor’s own administration.

The governor is playing charades and a double game here.

On one hand, both the federal government and state government are trying to squeeze money out of medical care, of which government is the biggest purchaser. Government long has underpaid hospitals for services they are required to provide to the poor, and lately the Malloy administration has greatly reduced subsidies to hospitals on the pretext that they would recover the money through the new national medical insurance program. That hasn’t happened.

On the other hand, organized labor and social service groups, constituencies of the governor’s party, the Democratic Party, oppose the sale of the hospitals, realizing that a profit-seeking corporation would be tougher than the current management of the hospitals.

While some hospitals in Connecticut are not managed well, what happens to hospital services and staff will be largely government’s decision, a matter of how much money government puts into them and how much it economizes with them.

Since the decision is to economize, the government generally and the governor particularly must want Tenet to do their dirty work and take the blame for it along with any profits.

* * *

With the Tenet deal suspended, Eastern Connecticut Health Network’s board of trustees and community corporators are back in business. Manchester Memorial and Rockville General hospitals remain their responsibilities for the time being, and although the hospitals are so insolvent that the trustees and corporators have given up on them and want to sell them, a former trustee who is now a corporator insists that they all have been doing a great job.

The former trustee and current corporator, Robert D. Rodner of South Windsor, wrote the other day that the trustees and corporators “always have been and continue to be well-respected, knowledgable, and dedicated members of our multi-town community … insightful, cautious, challenging, questioning, and supportive.”

In fact ECHN’s Board of Trustees has been rife with financial conflicts of interest, with several trustees owning companies that have done millions of dollars of business with ECHN. Of course those “questioning” trustees have never seen anything wrong in the grotesquely excessive salaries paid to ECHN’s executives, who have arranged that lucrative business for the trustees’ own companies.

That is, ECHN’s board has never been independent, has never been in a position to distinguish the interest of the hospitals from the interests of board members themselves. A few weeks ago, even as ECHN was laying off employees and freezing salaries, the company was paying big raises to its already overpaid executives.

The corporators should install a new board without conflicts of interest. Managed for public benefit rather than the benefit of its executives, ECHN still might survive with local nonprofit ownership.

Chris Powell is managing editor of the Journal Inquirer, in Manchester, Conn.

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