Yale New Haven Health’s bid to buy Milford Hospital is the latest development in a statewide trend that has seen independent hospitals acquired by larger chains.
Milford Hospital’s Board of Trustees voted last week to go forward with a deal that would see the 118-bed facility taken over by Yale New Haven Health. The organizations signed an asset purchase agreement and plan to file for regulatory review of the proposed acquisition.
Under the deal, all current Milford Hospital employees, unionized and non-unionized, would become employees of Bridgeport Hospital and union contracts will be recognized. During the months-long acquisition process, Milford will continue to operate as a separate organization.
Faced with mounting losses in its inpatient rehabilitation unit, Milford Hospital in 2014 teamed up with Yale New Haven Hospital and Bridgeport Hospital – both part of Yale New Haven Health system – to improve performance.
“The need for a broader relationship became apparent as financial performance continued to be challenged by the existing healthcare environment,” said a statement issued by Milford and Bridgeport hospitals at the time of the trustee vote. “These are challenging times for community-based hospitals in Connecticut and throughout the country,” added Mark Toney, chief restructuring officer of Milford Hospital.
Although the Milford acquisition was attributed to financial pressures, Milford Hospital actually made a small profit in the last fiscal year, state data shows.
According to the newly released 2017 Hospital Stability Report by the state Office of Health Strategy, Milford Hospital reported a profit of more than $500,000 in fiscal 2017, the most recent data available. That followed a $750,000 profit in fiscal 2016, a $4.6 million loss in 2015 and a $7.2 million loss in 2014. The hospital’s total margins, a measure of profitability, also improved from a reported 11 percent negative margin in 2014 to 0.78 percent positive margin in 2017. Milford’s margins still fell far short of the statewide average 7 percent in 2017.
Other indicators showed a decline in utilization of the facility: Total patient days at Milford fell from 12,880 in 2014 to 10,487 in 2017 and emergency department visits fell from 22,632 in 2014 to 19,881 in 2017.
Milford’s proposed acquisition was the third such deal announced in the state this year.
Hartford HealthCare, a six-hospital system, announced plans to buy St. Vincent’s Medical Center in Bridgeport in March. The two parties signed a definitive agreement this Monday. Also in March, Western Connecticut Health Network announced plans to merge with a network of Hudson Valley-area hospitals. Griffin Hospital in Derby is the only remaining independent hospital in the New Haven area.
“Hospital integration has been increasing in Connecticut and across the country, and integration is one way hospitals are addressing the needs of patients and communities,” said Connecticut Hospital Association spokesperson Michele Sharp. “Patients benefit when hospitals develop new solutions to provide them with high quality, coordinated, cost-effective, patient-focused care.”
Contact Liese Klein at lklein@newhavenbiz.com
