CT lawmakers set to approve multimillion-dollar deal to save Waterbury Hospital
The deal will let UConn Health borrow up to $390 million to purchase and upgrade Waterbury Hospital, along with two other health care facilities.
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Connecticut lawmakers are poised to approve a multimillion-dollar deal this week to save Waterbury Hospital from closure.
The long-awaited deal will let UConn Health borrow up to $390 million to purchase and upgrade Waterbury and two other hospitals along with a private partner.
State leaders hailed the plan as transformative, but some critics think the investment is too risky.
“MASS EXODUS”
Waterbury Hospital was on the brink of shutting down after the current owner, Prospect Medical Holdings, drove it and hospitals across the country into bankruptcy. The private-equity firm has also slashed staff, racked up safety violations and left more than $100 million in unpaid taxes and legal fees.
“It was a mass exodus,” said Marilyn Anthony, a longtime nurse at Waterbury Hospital. “Just the stress of what they were doing to us in staffing. Cutting staffing, not hiring staffing.”
A U.S. Senate investigation highlighted Prospect as an example of the dangers of private equity in health care.
“PMH’s primary focus was on financial goals rather than quality of care, leading to multiple health and safety violations as well as understaffing and the closure of several hospitals,” the January 2025 report said.
Despite that, Prospect’s parent company earned $424 million in dividends, “leaving PMH in severe financial distress,” according to the investigation.
UCONN HEALTH BUYOUT
On Tuesday, Gov. Ned Lamont delivered the news that 1,200 workers have waited years for.
“Waterbury Hospital, I told you we’d be back,” he told a cheering crowd of hospital employees.
UConn Health is pledging to turn the hospital around.
“The bones, so to speak, are strong,” said Dr. Andrew Agwunobi, the system’s CEO. “We have fantastic medical staff; we have great staff here. It’s just being under-resourced.”
Last Friday, UConn Health bid $13 million in cash and the assumption of $22 million in debts to purchase Waterbury Hospital.
The system hopes to purchase Waterbury, Bristol and Day Kimball hospitals to create a statewide network that can share resources and consolidate functions.
Heading the effort is board chair John Driscoll, of Stamford. Driscoll turned around Hartford-based CareCentrix, which he later sold to Walgreens for nearly $1 billion. Now he’s aiming to make UConn Health profitable, pushing for higher reimbursements and more philanthropic fundraising.
“We have a very detailed plan,” Driscoll told reporters. “There is example after example around the country where academic medical centers have partnered with community hospitals that were suffering from for-profit investors.”
Finding a buyer was a monumental challenge. Yale New Haven Health System originally agreed to purchase Prospect’s Connecticut hospitals for $435 million, but backed out after accusing the company of misrepresenting its financial situation and the hospitals’ condition. After a lengthy legal battle, Yale recently agreed to pay Prospect $45 million to end the sale.
For the first time since Prospect took over, employees said they are hopeful about the future.
“I’m very optimistic,” said Sarah Campbell, a nurse. “I think our old leadership, our old executive team, was not in the best interest of the hospital.”
RISKY INVESTMENT?
Critics worry that the deal is too risky for taxpayers.
“The real concern isn’t the purchase price – it’s how the deal would be financed,” said the Yankee Institute, a conservative think tank. “These new hospital entities would gain access to UConn’s existing bonding authority under the UConn 2000 Act, which governs the university’s long-term construction borrowing. The plan would expand that authority to hospital acquisitions, allowing UConn Health’s subsidiaries to issue state-backed bonds not only to buy hospitals but also to fund operations, replace equipment, and make long-delayed repairs.”
Not only does Waterbury Hospital carry deep debts; UConn Health has suffered losses for years, although the tide is turning. Supporters from both political parties said that expanding UConn Health into a statewide network is smart investment with sufficient protections.
“I think it gives us a strong, robust hospital in this part of the state,” Lamont said. “I think it’s part of a strong economic growth strategy.”
UConn Health has not identified a private partner yet. The deal to purchase Waterbury Hospital could close as early as next month.
Talks to buy Bristol and Day Kimball are ongoing.
The Connecticut House of Representatives will vote on the borrowing package on Wednesday. State senators take up the package on Thursday.
