A TALE OF TWO STATES

ONE WITH NO CON PROGRAM AND ONE WITH A STRONG CON PROGRAM

 
 

In 2010, Sierra Vista Regional Health Center (SVRHC) entered into a trial affiliation with Carondelet Health Network, a division of Ascension Health, the nation’s largest Catholic Health System. SVRHC was an independent, non-religiously affiliated hospital serving three rural counties in southeastern Arizona. Because Arizona does not have a state Certificate of Need (CON) Program reviewing proposed hospital affiliations and mergers, there was no state-level assessment of the impact this affiliation would have on patients who depend on SVRHC as their only local hospital. In particular, there was no consideration of the impact on reproductive health services historically provided at SVRHC, but not permitted under Catholic health care restrictions followed by Carondelet/Ascension. Affected health care consumers had no opportunity to object to this arrangement through public hearings or testimony to a state agency, as they would have had in some other states with CON programs.

Affected
health care consumers
had no
opportunity

to object through public hearings or testimony.

The affiliation went through quickly and Carondelet immediately required that SVRHC ban key reproductive health services, including post-partum tubal ligations.  A woman suffering a miscarriage was denied help ending her pregnancy to avoid infection, and instead was sent 80 miles away to Tucson to the nearest non-religious hospital, prompting community outcry. It took over a year of protests by a local coalition, with help from MergerWatch and the National Women’s Law Center, to pressure the hospital into ending the trial affiliation with Carondelet and restoring reproductive health services. SVRHC began the search for a new partner and eventually affiliated with a non-religious health system, which opened a brand-new facility in 2015 called Canyon Vista Medical Center.

In 2012, the city’s two aging and financially-struggling hospitals -- secular Waterbury Hospital and Catholic St. Mary's Hospital – would have come together under a joint venture with a Texas-based for-profit company, LHP Hospital Group.  LHP proposed to build one new replacement hospital, which, because of the involvement of St. Mary’s Hospital, would have had to follow Catholic health restrictions, and eliminate key reproductive health services. These restrictions were part of the demand made by the local Bishop in order to approve the involvement of St. Mary’s. 

Connecticut has a strong Certificate of Need program, overseen by the Office of Health Care Access (OHCA) and the state Attorney General, and approval was needed for this transaction, which was both a merger of two non-profit entities and a conversion to a for-profit. Health care advocates, labor, and members of the public were able to voice objections to this joint venture. The Governor as well as Waterbury city officials, all took strong positions on the deal, but had differing bottom line requirements.  Various compromises were proposed, but the parties involved never came to an agreement and the deal fell apart.

Health care advocates, Labor, and members of the public were able
to voice objections
to this joint venture.

In 2014, Waterbury Hospital, still seeking a partner, entered into an agreement to be purchased by a national for-profit hospital system called Vanguard (which became Tenet Healthcare Corporation). Tenet proposed a deal that included four other hospitals in Connecticut. This deal also required approval by OHCA and the Attorney General (AG), through the CON process. Due to the unprecedented breadth of the planned purchase and resulting concerns about the conversion of 5 non-profit hospitals into a for-profit system, OHCA/AG imposed a number of conditions on the sale, including requirements to preserve existing services. Tenet rejected these requirements and backed out of the deal. 

Currently, Waterbury Hospital is in the process of finalizing another for-profit hospital partnership with Prospect Medical Holdings, and the CON application is pending with OHCA/AG. This is one of several hospital consolidations underway in Connecticut, recently curtailed by a one-year moratorium on CON approvals imposed by the Governor.  Citing concerns about run-away consolidation of the hospital market in that state, Gov. Dannel P. Malloy issued an executive order in February 2016 to create a specially-appointed CON task force that he said would begin an extensive overhaul of Connecticut's certificate of need process. "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 said in a statement. “We need balance. Fewer healthcare systems mean fewer choices for consumers, and that can dramatically affect both the quality of care and costs. It's time we take a holistic look at the acquisition process.”

That task force has started meeting in Hartford on a monthly basis and is expected to report on its work next year.