Johnson Memorial Medical Center, the struggling Stafford Springs hospital that emerged from bankruptcy late last year, signed an exclusive and confidential agreement to explore an affiliation with St. Francis Hospital and Medical Center in Hartford.
Johnson Memorial officials said Thursday the proposed affiliation would help the hospital maintain an inpatient hospital presence in north central Connecticut, expand clinical services, enhance physician retention and recruitment, and assist in the implementation of key capital projects.
The Hartford Business Journal reported in May that Johnson Memorial and St. Francis Hospital were in affiliation talks.
“By affiliating all of Johnson Memorial Medical Center’s entities with Saint Francis, our organization will be positioned to serve the community for many decades to come,” said David Morgan, the interim president and CEO of JMMC. “We look forward to creating an affiliation that makes business sense, but most importantly, we want to continue to provide our community with the highest quality care and service possible. Like JMMC, Saint Francis is patient-focused, which is why this prospective affiliation makes perfect sense.”
In a statement, St. Francis said the deal would be an important element of its integration strategy in northern Connecticut, where it currently has access center facilities in Enfield and Ellington.
“We are excited about the opportunity to consider this affiliation with Johnson Memorial Medical Center,” said Christopher Dadlez, president and CEO of Saint Francis Hospital and Medical Center. “It will ensure continued inpatient hospital presence in north central Connecticut so that the right care, in the right place, for the right cost will remain in place for local residents. This alliance will help to secure JMMC’s market position in the future and we are proud to be a part of this process,”
Discussions between the two hospitals will also explore the possibility of integrating the members of Johnson Professional Associates, the hospital-employed physicians of JMMC, into the Saint Francis Medical Group.
Saint Francis will also work to develop a capital plan with JMMC, with the assistance of Cain Brothers, an investment banking and strategic advisory firm that focuses exclusively on the health care industry.
Waterbury Hospital, which is also looking for a potential affiliation partner, has also tapped Cain Brothers in its search efforts.
Johnson Memorial emerged from bankruptcy in October as an independent organization, a surprising turnaround for the company, which some hospital officials predicted would likely not survive long-term without a merger.
But, even with bankruptcy behind it, the hospital continues to struggle financially and has little to no capital resources. The hospital has been making an aggressive push to find a larger partner, so it can leverage a group’s purchasing power and gain greater access to capital for needed investments in electronic medical records and other infrastructure.
The hospital was close to being acquired by the Eastern Connecticut Health Network in 2009, but a proposed $65 million deal abruptly fell apart after ECHN cited concerns about cost.
