Hartford HealthCare has won the right to buy Manchester Memorial and Rockville General hospitals for $86.1 million, according to documents filed in bankruptcy court late Saturday.
No other prospective buyers stepped forward by the deadline of 5 p.m. Thursday to submit a bid for the two troubled hospitals, currently owned by for-profit Prospect Medical Holdings. Without additional bidders, a bankruptcy auction scheduled for Oct. 22 will not take place.
Hartford HealthCare and Prospect officials could not immediately be reached for comment.
Bidding as ECHN Holdings Inc., Hartford HealthCare agreed to buy Manchester Memorial, Rockville General and affiliated entities “free and clear of liens, claims, encumbrances, and interests,” according to an asset purchase agreement filed with the notice of the winning bid on Saturday. The deal includes the land underneath the hospitals, which was sold to Alabama-based Medical Properties Trust as part of a controversial sale-leaseback transaction in 2019.
Prospect has been seeking to sell all of its Connecticut holdings – including Waterbury Hospital – since it filed for bankruptcy on Jan. 11.
UConn Health has said it intends to submit a bid to buy Waterbury Hospital in a deal that includes $13 million in cash and forgiveness of state tax debts, but no bid had been filed in the bankruptcy court record as of publication time.
Hartford HealthCare’s next step is to secure the approval of Judge Stacey Jernigan, who is hearing Prospect’s bankruptcy case in North Texas federal court. Jernigan has approved all of Prospect’s hospital transactions so far, including a for-profit chain’s bid to buy six California hospitals for $8.5 million and some assumption of debt.
The Hartford HealthCare hospital purchases will then have to be approved by state regulators.
After a lengthy approval process, Yale New Haven Health’s $435 million bid to buy all three hospitals foundered last amid allegations that Prospect mismanaged the hospitals after striking a deal, reducing their value. The court fight between the two systems ended earlier this month with Yale agreeing to pay $45 million in cash to settle the dispute.
If Hartford HealthCare wins all needed approvals and completes the purchase of Manchester Memorial and Rockville General, the two facilities will bring the system to nine hospitals and nearly 2,855 licensed hospital beds, making it the biggest hospital chain in the state by many metrics. Rival Yale New Haven Health operates five hospitals in Connecticut with a total of 2,568 licensed beds.
Manchester Memorial and Rockville General would join a network anchored by flagship Hartford Hospital, which includes Backus Hospital in Norwich, Charlotte Hungerford Hospital in Torrington, the Hospital of Central Connecticut in New Britain, MidState Medical Center in Meriden, St. Vincent’s Medical Center in Bridgeport and Windham Hospital in Willimantic.
Local lawmakers have said they hope Hartford HealthCare will invest in and restore services to the two Prospect hospitals, collectively known as the Eastern Connecticut Health Network.
Prospect closed Rockville General’s surgical services, intensive care and medical/surgical units in 2020 citing pandemic impacts, but failed to reopen them after the crisis passed and was then punished by the state. The units remain closed and staffing at the hospital has been scaled back as volume has plunged.
Rockville General’s patient days, a key measure of volume, fell to 1,010 in fiscal 2023 compared to 7,802 in fiscal 2020, a decline of 87%, according to a report by the state’s Office of Health Strategy. Only 11 of Rockville’s 118 licensed hospital beds were staffed, and those beds had only 25% occupancy.
By contrast, Manchester Memorial’s patient days rose to 49,735 in 2023 compared to 42,766 in 2020, a 16% increase, with the hospital’s 228 staffed beds reported at 60% occupancy in 2023.
Financial woes persist at both hospitals: Rockville General lost $9.6 million on its operations in fiscal 2024, Manchester Memorial lost $385,843, and the ECHN system as a whole lost $18.4 million, according to the most recent documents filed with the state’s Office of Health Strategy.
As of the first half of this year, all of Prospect’s Connecticut hospitals had zero days of cash on hand, a sign of serious financial instability.
Mounting losses led to the closure of four Prospect hospitals in Pennsylvania, two since the company’s bankruptcy filing.
A deal to sell two of Prospect’s Rhode Island hospitals to a private foundation has been on hold for months as financing has failed to materialize. Last week, the Centurion Foundation proposed tapping into the hospitals’ past charitable donations to fund its purchase, according to news site the Rhode Island Current.
This article originally published at Hartford HealthCare wins auction for Manchester Memorial and Rockville General hospitals for $86M.
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