St. Mary’s Hospital and Waterbury Hospital Agree To Merge, Now Must Seek State Approval

Story and Photographs By John Murray

   The Waterbury Observer has confirmed with five sources that Saint Mary’s Hospital and Waterbury Hospital are planning to sign a letter of agreement to merge, and if they get state approval, the new entity will build a new hospital in the city, possibly on Freight Street. Sources for this story included board members from both hospitals, political insiders, and a prominent local businessman, all who requested their names not be published before the hospitals make the announcement official.

      The first step in a lengthy process is for the two hospitals to sign a letter of intent, or a letter of agreement, which is expected to be announced as early as tomorrow. The agreement, sources have told the Observer, will be carefully worded due to a myriad of hurdles that still need to be overcome. . Waterbury Hospital has unions that need to be integrated into a merger, and Saint Mary’s is a Catholic hospital committed to following church directives (including no birth control). A source told the Observer that Saint Mary’s had to seek approval from the Vatican, and that approval has been granted from Rome. But perhaps the greatest obstacle to a merger is gaining state approval, and overcoming potential blow-back from non-profit powerhouses Yale-New Haven Hospital, and Hartford Hospital.

   Merger talks between the two hospitals in Waterbury have been on-going for more than a decade, but the talks appeared to be defunct in March of 2011 when Saint Mary’s entered into a partnership with LHP Hospital Group, of Plano, Texas. The details of that agreement are posted on Saint Mary’s Hospital website (www.futureforsaintmarys.com). Basically, if that partnership is approved by the Connecticut Office of Health Care Access, LHP will invest $200 million in Saint Mary’s Hospital to wipe out debts and make capital improvements. Saint Mary’s would then become a for-profit hospital jointly owned with LHP and would retain its entire staff.

   An article published in the Republican-American newspaper on March 23rd stated that the deal between Saint Mary’s and LHP did “not preclude future merger talks with Waterbury Hospital.” And apparently the talks continued to the point that the two hospitals are now ready to sign a letter of agreement to merge. 

   The implications are staggering. The City of Waterbury is the largest employer in Waterbury, but Saint Mary’s Hospital is #2, and Waterbury Hospital #3. At the moment the not-for-profit hospitals pay no tax to Waterbury. If the Saint Mary’s and LHR partnership is approved by the state of Connecticut, and then merged with Waterbury Hospital into a larger for-profit hospital, Waterbury’s grand list will grow. After all the partnerships and mergers are completed, it would be a three way deal between St. Mary’s Hospital and Waterbury Hospital and LHP.

   Why would a venture capitalist invest hundreds of millions of dollars in consolidating two hospitals in Waterbury, and propose building a new “for-profit hospital” in the next five to ten years?

   One word answer – ObamaCare.

   Everyone is going to be insured, and the hospitals aren’t going to be stiffed anymore when they provide medical services. Amazingly, hospitals might begin to make money.

   There have been discussions about building a new hospital on Freight Street, which would provide easy highway access, and high visibility. It might take years to get state approval for the project, and clean up contaminated brownfields to make way for a new hospital, but according to multiple sources, the first step has been taken – Saint Mary’s Hospital and Waterbury Hospital have agreed to merge.