With acquisition, hospital broadens reach

On September 11, in a historic ceremony, officials from Yale-New Haven Hospital (YNHH) and the Hospital of Saint Raphael (HSR) signed final documents. Hours later, at 12:01 a.m. the next day, the two hospitals officially became a single 1,519-bed institution with two main campuses.

“We are delighted that with all of the necessary approvals and due diligence behind us, we can begin the important work of integrating these two great hospitals,” said Marna P. Borgstrom, M.P.H., CEO of YNHH and president and CEO of Yale-New Haven Health System. “We believe that as one unified hospital, we’ll be able to enhance access to high-quality health care resources in a more cost-effective manner. This integration will be critical to meeting the extraordinary health care challenges that lie ahead.”

The integration will allow YNHH to provide the region with more coordinated care, to reduce redundancy of clinical services and financial investments, and to become more efficient. It also gives YNHH 511 much-needed beds and provides financial stability for the HSR campus.

While volume at most Connecticut hospitals has been flat or declining over the past several years, YNHH has seen an increase, resulting in significant capacity constraints; the HSR acquisition will allow YNHH to avoid an estimated $650 million investment in a new patient tower.

The transaction helps HSR to preserve a deeply rooted legacy as an exceptional care provider and to honor its traditions as a Catholic hospital, while also taking on the future as part of a nationally recognized academic medical center.

“For the Hospital of Saint Raphael, the integration represents an opportunity to assure financial stability in an uncertain time. Proceeds from the $160 million transaction will allow the hospital to pay off its debt and will help address its pension liabilities,” said Christopher O’Connor, HSR president and CEO. “We are intent on making this integration go as smoothly as possible for our patients, our employees, physicians, and the community. This represents a Connecticut solution to a Connecticut challenge.”

To better prepare for the 21st century health care landscape, HSR leaders began discussions with potential partners two years ago, including both state and national hospitals and systems; Catholic and secular hospitals; and for-profit and non-profit companies. In March 2011, HSR and YNHH signed a letter of intent to explore integration, followed by a definitive agreement in September, in which YNHH agreed to purchase HSR’s assets, to invest in HSR buildings and technology, and to honor HSR’s Catholic heritage at that campus.

The Sister Anne Virginie Grimes Health Center, Saint Raphael’s 125-bed skilled nursing and short-term rehabilitation facility, is also being acquired as part of the transaction.

Both hospitals worked for the past year to minimize job losses by keeping vacant positions open and managing attrition. About 3,400 HSR employees are transitioning to positions in the Yale-New Haven Health System. Additionally, 400 members of the HSR medical staff have been newly credentialed as members of the YNHH medical staff.

“The integration has the opportunity to increase quality outcomes and provide better access to the entire continuum of care for patients,” said Peter N. Herbert, M.D., chief of staff and senior vice president of medical affairs at YNHH and clinical professor of medicine at the School of Medicine. “Care will be better coordinated as clinical information and data will be accessible to all patients and providers though a new, state-of-the-art integrated electronic medical record system.”

Following the signing of the definitive agreement, there was a months-long approval process that included the Connecticut Attorney General, the Federal Trade Commission and Connecticut Office of Health Care Access.

Local and state elected officials, community leaders and regional businesses were overwhelmingly supportive of the integration.