Hospital affiliation process goes forward

NORTHWEST CORNER  —  Charlotte Hungerford Hospital (CHH) and Hartford HealthCare have submitted a formal application for affiliation to the Department of Public Health.

The application is the next step in the process of a merger of the organizations.

Both organizations investigated a potential affiliation in late February, and an affiliation was approved by the boards of both organizations in early August.

The 323-page application is available on the department’s website, at www.ct.gov/dph/lib/dph/ohca/conapplications/2016/16_32135_con.pdf.

According to Brian Mattiello, CHH’s vice president of organizational development, the state is reviewing the application.

“The state has 30 days to let us know if they have completeness questions in any part of the application, including the need for any additional information or any follow up questions,” Mattiello said. “We will then have 60 days to respond to them, which will put us into next year. We expect a formal process, including public hearings and testimonies.”

Mattiello said the application details the proposed affiliation “in a more detailed way than we previously could with the public because of a non-disclosure agreement.”

He added that he could not estimate when the state would make a decision on the application.

“Both parties are committed in seeing this affiliation through and satisfying regulatory requirements,” Mattiello said. “It has been an invigorating process for both parties sharing the responsibility for completing this application. It is a very affirming direction we are moving in.”

Application data

The application says that affiliation would allow both organizations to “broaden access to primary and specialty care in Northwest Connecticut, achieve operational efficiencies, improve quality and manage population health, among other achievements.”

It also says that CHH, “without a capable health system partner,  faces an uncertain future with mounting financial pressures, shifting demographics, inability to meet growing demands of consumers in its market, in addition to health professional shortages in its service area, and steep, ongoing capital requirements.”

According to data in the application, CHH’s operating margin has been in decline for the past two fiscal years.

In fiscal year 2015, the hospital’s operating margin dropped to –1.19 percent.

In fiscal year 2016, the hospital’s operating margin is projected to decline to –5.65 percent.

“An independent community hospital simply cannot sustain these losses year over year and remain viable,” the parties state in the application. “One of the major causes for the flat-to-negative operating margins has been a significant drop in discharges. 

“Inpatient discharges have declined 13 percent from 6,338 in fiscal year 2012 to 5,503 in fiscal year 2016. The most recent declines in volume are believed to be attributable to medical staff departures and retirements, along with a decreasing primary care presence in the community. The overall trend is symptomatic of the difficulty CHH has in attracting and retaining physician talent with technology and advanced practice methodologies. Sustained operational efficiencies and the recruitment of physicians are critical to CHH’s ability to provide quality health care services to an underserved community.”

As part of the proposed affiliation, Hartford HealthCare would replace CHH as its sole corporate member.

If the affiliation is approved, Hartford HealthCare would have powers to oversee CHH’s business affairs.

Future plans

As part of the affiliation agreement, the two organizations would establish a primary-care and ambulatory-care network. 

The network would include “the development and expansion of services and programs offered to the greater Winsted community, including the development of a new, modern multispecialty care center and the development of an ambulatory surgery network in the northwest region.”

There are no specific details in the application itself as to how the network will be expanded.

Back in December 2014, Winsted’s Planning and Zoning Commission approved plans for a new medical center at 70-84 South Main St.

Plans for the building, which is supposed to be leased by Hartford HealthCare, calls for a 20,000-square-foot, two-story structure.

However, the planned building is not mentioned anywhere in the affiliation application.

Hartford HealthCare Director of Communications Shawn Mawhiney, the organization has not yet determine whether or not to go forward with the project.

“We are waiting for state and federal approvals for the affiliation between Hartford HealthCare and Charlotte Hungerford before we move forward with any projects in that region, including Winsted,” Mawhiney wrote via email. “What was presented [to the commission] was before our proposed affiliation. We need the approval process to run its course and then we can take a look at the Winsted project.”