The wave of hospital consolidation in Connecticut just won’t let up.
Lawrence & Memorial Hospital in New London announced Wednesday that it has entered into an exclusive non-binding letter of intent to explore a possible affiliation or merger with The Westerly Hospital in Rhode Island.
Discussions between board and administrative leaders from both hospitals began about two months ago and now both organizations will begin a due diligence process to determine if a strategic alliance is possible.
“In these challenging times, and given the enormous changes being thrust upon hospitals, it’s increasingly common for hospitals to explore opportunities to lower costs and enhance patient care through new organizational models and new inter-organizational relationships,” said Bruce D. Cummings, president and chief executive officer of Lawrence & Memorial. Â “We have an obligation to our patients, our employees and our communities to explore opportunities that have the potential to enhance ourselves clinically, operationally and financially. I believe an alliance with Westerly may well be one of those rare opportunities whereby two organizations and the communities they serve can all benefit by coming together.”
Officials from both hospitals said it would take at least four additional months to determine whether some form of alliance is in the best interest of both hospitals and their communities. This does not include any necessary period of review by Connecticut, Rhode Island and federal regulatory authorities.
Hospital mergers and affiliations are becoming commonplace in Connecticut and are beginning to reshape the state’s healthcare landscape.
Just last week, St. Mary’s and Waterbury hospitals announced plans to merge. Johnson Memorial Medical Center in Stafford Springs recently signed an exclusive agreement to explore an affiliation with St. Francis Hospital and Medical Center in Hartford.
Yale-New Haven Hospital and the Hospital of Saint Raphael are also exploring the possibility of a merger.
And earlier this year, Hartford Healthcare added The Hospital of Central Connecticut in New Britain to its already extensive network.
All of the activity is being spurred by declining government reimbursements, pressure to invest huge amounts of capital in technology and infrastructure, and the constantly changing political and regulatory landscape, including the new federal health care reform law.
