Western Connecticut Health Network has explored a potential combination with New York’s largest hospital group, according to multiple independent sources, even as the pace of hospital mergers nationally has slowed amid continuing uncertainty caused by the Trump administration’s efforts to dismantle Obamacare.
Rumors have centered on Northwell Health, known until 2016 as North Shore-LIJ Health System and billing itself as the largest hospital group in New York with more than 20 hospitals largely on Long Island, along with more than 550 outpatient physician practices. The nonprofit generates $11 billion in annual revenue and employs more than 62,000 people under CEO Michael Dowling.
Danbury-based Western Connecticut Health Network runs Danbury Hospital, Norwalk Hospital and New Milford Hospital,
$1.2 billion in revenue for its 2016 fiscal year ending last September.
Reached by Hearst Connecticut Media, a WCHN spokeswoman said the rumor is not true and did not elaborate further.
Northwell changed its name in 2016 in a nod to its geographic expansion plans beyond Long Island. The organization has left intact the historic names of the hospitals it has accumulated over the years, the nearest to western Connecticut being the tiny Northern Westchester Hospital in Mt. Kisco, N.Y.
Northwell Health lists an existing strategic alliance with Yale New Haven Health, whose institutions include Bridgeport Hospital and Greenwich Hospital.
The state Department of Public Health would have a final say in approving any transfer of control, along with the WCHN board of directors, which is chaired by Richard Jabara, co-founder of Meyer Jabara Hotels in Danbury.
Gov. Dannel P. Malloy imposed a temporary moratorium last year on the transfer of major hospital systems to new owners as the state studied the approval process it uses to vet deals. Malloy’s order came on the heels of ample merger activity of late in Connecticut’s health care sector, including in 2016 with Trinity Health New England’s deal for Waterbury’s St. Mary’s Health System; Yale-New Haven Health System moving for New London’s Lawrence & Memorial Hospital; and Prospect Medical rolling up Waterbury Hospital, Manchester Memorial Hospital and Rockville General Hospital.
In March, St. Vincent’s Medical Center in Bridgeport
similar insider rumors it is readying for a sale, while leaving the possibility open it may do so at a future date.
The chatter at WCHN has been sufficiently audible within the ranks of the Connecticut Health Care Associates nurses union to prompt CHCA President Mary Florio to reach out to a human-resources contact at WCHN, with no details forthcoming. Florio told Hearst Connecticut Media she instructed union staff to check up on Northwell’s management of its own nursing cadre, and to date has heard positive reports on that front.
Mergers have slowed nationally, according to Irving Levin Associates, a Norwalk-based firm that analyzes health sector merger activity. Irving Levin Associates tracked 90 hospital combinations in 2016, 12 fewer than the year before, with the slowing pace extending into the first quarter of this year.
“The hospital sector has been greatly affected by the uncertainty surrounding the ‘repeal and replace’ efforts by the Congressional Republicans,” said Lisa Phillips, editor of the Health Care M&A Report published by Irving Levin Associates, in a statement accompanying the study. “Until the legislative issues are settled, mergers and acquisitions in this sector will stay soft. … Strategic acquisitions between large health systems are still possible, but the majority of hospital deals in the next quarter will be driven by finances.”
Under CEO Dr. John Murphy, WCHN has expanded its own balance sheet since the recession, with the organization formed in the 2010 marriage of Danbury Hospital and New Milford Hospital, then adding Norwalk Hospital in 2014. As with Yale New Haven Health and Stamford Health System, WCHN has simultaneously been extending its network of physician practices into neighboring territories in an effort to steer more patients to its acute-care hospitals in Danbury, Norwalk and New Milford.
On its website, WCHN lists an employee base numbering 4,100 people, with about 1,160 physicians on its medical staff.
Dirk Perrefort contributed to this report; includes prior reporting by Keila Torres Ocasio. Alex.Soule@scni.com; 203-354-1047; www.twitter.com/casoulman