Hartford Healthcare (HHC) said it has taken the first steps towards a potential deal to include Charlotte Hungerford Hospital (CHH) in its statewide network.
HHC and the independent Torrington hospital this week signed a memorandum of understanding that could lead to a definitive agreement that would add CHH to an existing network of five acute-care hospitals and one psychiatric hospital owned by HHC.
A final agreement could emerge in the coming months, after a period of due diligence.
HHC’s current network includes Hartford Hospital, Backus Hospital, the Hospital of Central Connecticut, MidState Medical Center, Natchaug Hospital, and Windham Hospital.
CHH said it has been evaluating possible strategic affiliations since 2014.
“After thorough deliberations, the committee recommended, and the board concluded, that Hartford HealthCare demonstrated the greatest desire for a mutual commitment of services and the clearest shared vision and culture with CHH,” it said in a statement Thursday.
Charlotte Hungerford, which has 109 beds, recorded a $3 million margin in fiscal 2014, up from $2.7 million in 2013, according to Department of Public Health filings.
Though it has been running a surplus, CHH board chairman John Janco said the potential affiliation is driven by a fast-changing healthcare landscape.
“Today’s economic and financial pressures require us to take the necessary steps to ensure we remain financially viable, while providing quality healthcare provider that offers the very best technology and care,” Janco said. “The affiliation process helped us determine that the hospital is in a secure position and that now is the time to be proactive in considering a strategic partner.”
Any deal between the two providers would require state regulatory approval.
Malloy pressing brakes on hospital consolidation
Gov. Dannel P. Malloy, not more than two hours after the HHC announcement, announced that he wants a “holistic look” at the acquisition process for hospitals in the state.
Malloy said he has ordered the Department of Public health not to make any final decisions on certain hospital acquisition and conversion applications, including previously reviewed applications, until Jan. 15, 2017.
“We’ve been taking a piecemeal look at the Certificate of Need process for several years,” Malloy said. “It’s time for comprehensive reform. With continuing changes in the healthcare industry, it is critical that our state laws ensure that all hospitals continue to thrive, and that the deck is not stacked in favor of fewer than a handful that dominate the marketplace.”
Malloy’s announcement did not mention Hartford Healthcare or any other specific provider. It’s unclear whether the action would affect HHC’s pending deal with CHH.
His order calls for the creation of a task force, chaired by Lt. Gov. Nancy Wyman, that will “help ensure fair, open market conditions in the healthcare industry.”
