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Lamont proposes legislative package to improve state healthcare system oversight

Gov Ned Lamont on Thursday released a package of legislative proposals that he said will modernize and update the state’s oversight processes for regulating the way healthcare entities are owned, funded, managed and sold.

Lamont wants the General Assembly to consider ratifying the proposals, which he said are intended to increase the oversight and financial stability of Connecticut hospitals, health systems and medical practices, while also ensuring that they continue “providing the high quality, accessible and affordable care that the state’s residents deserve.”

“The state needs to have a role in overseeing large financial transactions involving healthcare practices and facilities so that we can ensure that the critical services these facilities provide continue to be readily available to our residents,” Lamont said. “In recent years, we’ve seen a real change in how the healthcare system is being operated.”

Specifically, he cited the increasing share of state healthcare systems being owned or managed by out-of-state, for-profit companies. 

“These recent changes have shown that our current statutes contain loopholes allowing important transactions to escape necessary review,” Lamont said. “I am urging the General Assembly to update our laws to enable the state to have proper oversight of significant health system transactions.”

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The bill Lamont will present to the legislature will include:

  • Strengthen the existing “notice of material change” statute to make sure the Office of the Attorney General and Office of Health Strategy (OHS) have insight into transactions “that have the potential to negatively impact the healthcare system’s quality, access, or affordability – not just antitrust laws.” Under current law, many transactions escape scrutiny, he said.
  • Establish an Office of the Attorney General/OHS review process to look for red flags in healthcare transactions.

“We need to provide the state with the tools needed to protect our healthcare system from dangerous and destabilizing practices and ensure that our system continues to provide quality, accessible, and affordable health care for all,” Lamont said.

OHS Commissioner Dr. Deidre S. Gifford agreed. 

“We’ve all become aware of how major transactions in healthcare can impact the financial stability of our institutions,” Gifford said. “These changes also touch the lives of patients, providers and healthcare workers in less obvious ways and can also impact healthcare affordability for consumers. 

She added that it is known “that some changes in ownership or control can lead to poorer quality, more expensive care — the opposite of what we want for Connecticut residents.”

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The comments refer to the many issues that have arisen with the ownership of three Connecticut facilities  — Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital — by Prospect Medical Holdings, a for-profit entity that recently filed for bankruptcy.

 “We’ve all seen what can go wrong when private equity is allowed to strip mine our local hospitals and healthcare institutions,” said Attorney General William Tong. “And we’ve seen growing challenges with access and affordability of care due to unprecedented levels of consolidation in healthcare delivery in Connecticut. I fully support these measures to strengthen oversight and transparency around these transactions and acquisitions.”

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