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An update on the status of ECHN's proposed transaction, from Peter Karl, ECHN President & CEO:
While I am pleased to report that we continue to make good progress with our ongoing negotiation of an Asset Purchase Agreement, and while Tenet Healthcare, Yale New Haven Health System (YNHHS) and ECHN remain committed to a successful transaction, the process is taking longer than anticipated.
Several factors have contributed to this longer process, including among other factors Tenet’s acquisition of Vanguard Health System (VHS) in the fall of 2013 and unanticipated political and legislative developments in Connecticut.
While we work to finalize an agreement with Tenet and YNHHS, we are also closely following the current political climate at the State Capitol related to not-for-profit hospital conversions. There is a possibility that State regulators could impose additional legal requirements for investor-owned companies that seek to operate hospitals in Connecticut. Unfortunately, that decision could cause additional delays in this transaction. To date, the General Assembly’s Public Health and Labor and Public Employees Committees have also held informational hearings in order to understand how investor-owned hospital companies may affect health care delivery in Connecticut. At these hearings, representatives from the Office of Health Care Access (OHCA), the Attorney General’s Office, the Connecticut Hospital Association, Waterbury Hospital, ECHN and labor union leaders representing hospital workers shared their perspectives on these complex issues. With the legislative session running from February 5, 2014 through May 7, 2014, we will continue meeting with members of our local legislators to ask for their support for our transaction.
For these reasons, we are updating our anticipated timeline to take into account the current environment in Connecticut. Unfortunately, we will likely not be in a position to request Corporator approval of the transaction in January. We will also delay for now the public forums we had hoped would take place in January, although we welcome input or questions from you at any time.
In the interim, we will continue to keep you updated regarding the proposed transaction. ECHN has prepared a booklet that outlines the transaction process to date including ECHN’s assessment of how best to preserve the ECHN health services in eastern Connecticut in the midst of significant financial pressures and new regulatory challenges faced by health care providers throughout the region. I encourage you to share the information we have provided with any of your colleagues, friends and family who have an interest in learning more about the challenges we face and the strategy we have developed to address them.
I appreciate your patience as we move through this process. I am confident that this very careful, deliberate and thorough process has led to an attractive and long-term strategic opportunity for ECHN and our patients. I hope that you will join me and voice your support for this transaction while providing reassurance to your neighbors and friends that our direction will secure a bright future for ECHN and those we serve.