Tenet Healthcare Corp. was set to purchase five hospitals in Connecticut. But after the Dallas-based chain was unable to come to terms with state regulators on converting the not-for-profit facilities to for-profits, it decided to scrap the deal, which had been in the works for several years. That has left the management of those five properties scrambling to find alternatives, the Hartford Courant has reported.
Eastern Connecticut Health Network, which owns the hospitals, immediately began looking for other potential buyers and sent proposals to four in-state operators within 48 hours of the Tenet deal collapse, according to the Courant.
Tenet had announced in December that the nearly four dozen conditions placed on the deal by the Connecticut Office of Health Care Access was unreasonable, but negotiations continued on in the hope of reaching a compromise.
Eastern Connecticut Health represents a signifcant chunk of the state's acute care hospitals--it operates nearly 20 percent of the 29 facilities now in operation. It spent $4 million on the failed deal and about a quarter of its management's time over the past two years.
"I would say in two to three years there would be a threat to (Eastern Connecticut's) long-term survival if we don't partner with someone," system Chief Executive Officer Peter Karl told the Courant. "Consolidation is inevitable, so it's a matter of getting to the dance on time."
Meanwhile, state lawmakers and other officials are concerned that Connecticut may have become too anti-business for hospital operators to effectively operate and consolidate where needed. However, some officials say they prefer local hospital operators.
"It's local vs. out-of-state," Connecticut Speaker of the House Brendan Sharkey told the Courant. "I don't want healthcare decisions being made from Dallas when they can be made in New Haven."
But some are pleased that the Tenet deal fell apart. In an opinion piece, the Journal-Inquirer newspaper wrote it was good that the deal was not consummated. "The deal could have been closed--if Tenet got everything it wanted. This included blanket control over Connecticut's future regulation of hospitals," the newspaper concluded.