Frequently Asked Questions

ECHN has signed a non-binding letter of intent (LOI) that will allow for the exploration of an affiliation with Vanguard Health Systems and Yale New Haven Health System (YNHHS).
Q. What does signing a non-binding letter of intent mean for ECHN?

A. A letter of intent (LOI) outlines the terms between parties who have not formalized an agreement into a contract. All parties agree to continue bargaining in good faith until a definitive purchase agreement is finalized. Any negotiated agreement is subject to state and federal regulatory approvals.
Q. What does this announcement mean for ECHN?

A. The LOI outlines that the Vanguard/Yale New Haven alliance will purchase the assets of ECHN and invest the capital resources necessary to ensure the ongoing local delivery of care. Vanguard will manage and operate Rockville General and Manchester Memorial Hospitals as well as the other ECHN affiliates. Yale New Haven Health System will provide ongoing clinical support, quality and clinical service line management. The strategic relationship will provide a unique opportunity for ECHN to develop a strong clinical partnership with a leading academic medical center like Yale New Haven to provide high-quality care. It will also allow for significant cost and operational efficiencies by spreading costs across a wider base of the combined organizations’ operations and through the better coordination of care. Vanguard will provide the financial ability to invest capital and resources into new technology, programs and facilities to grow ECHN. Under the partnership, Yale New Haven Health System and all of its delivery networks would remain an independent, not-for-profit health system.
Q. How and why was the decision made to be acquired by Vanguard Health Systems with Yale New Haven Health System?

A. ECHN’s Board, a Partnership Workgroup comprised of trustees and physicians, and the Transaction Committee of the Board have been deliberate and thorough during the past 18 months in evaluating the most responsible and beneficial transaction to ensure that a strong healthcare system remains east of the river in light of the current and anticipated changes in healthcare. Joining forces with Vanguard Health Systems and YNHHS will bring their nationally recognized reputations and expanded services east of the river. The mergers and acquisitions of healthcare companies in Connecticut and across the nation are a product of many changes resulting from the rollout of the Patient Protection and Affordable Care Act.
Q. How will this transaction benefit the community?
A. We expect that our communities will benefit by ECHN joining forces with Vanguard and Yale in several ways. One benefit will be the addition of specialty care physicians working in concert with our own highly regarded medical staff to bring world-class care to eastern Connecticut. This means our patients will not have to travel elsewhere for advanced specialty care; instead we can expect to bring more services to our communities. In addition, it will bring access to capital resources for new and expanded programs and services, the acquisition of new medical and information technology and future improvement of facilities.
Q. Can you tell us more about Vanguard Health Systems?
A. Vanguard Health Systems, Inc., founded in 1997, is based in Nashville, Tenn. Vanguard owns and operates 28 acute-care and specialty hospitals in Arizona, Illinois, Massachusetts, Michigan and Texas. As of June 30, 2012, Vanguard had approximately 41,000 employees and generated $5.95 billion of revenue for its fiscal year then ended. Vanguard’s size will bring economies of scale and efficiencies which will allow us to better deal with reduced payments for services in the future. Having 28 hospitals across the nation sharing their best practices will allow us to not only operate more efficiently but to continuously look to improve and deliver the best quality care. Vanguard also brings experience operating under new payment models that have resulted from healthcare reform that change how patient care is delivered.
In June, Vanguard announced that it had signed a definitive merger agreement to be acquired by Tenet Healthcare Corporation. Upon closing of this acquisition, the combined organization will become the third largest healthcare network in the country with 79 hospitals and more than 160 outpatient centers. Tenet shares the same values and focus as Vanguard, with a strong emphasis on quality care and the communities it serves.
Q. What can you tell us about Yale New Haven Health System?
A. Yale New Haven Health System (YNHHS) was formed in 1996 to enhance the quality and scope of healthcare services for residents of Connecticut, eastern New York, southwestern Rhode Island and beyond. YNHHS includes three corporate member Delivery Networks: Yale-New Haven Hospital; Bridgeport Hospital; Greenwich Hospital; as well as a physician foundation, Northeast Medical Group. YNHHS is a nationally acclaimed academic medical center recognized for world-class care.
Q. What happens between now and the closing of the proposed transaction with Vanguard and Yale New Haven?
A. The signing of the LOI represents the first round in this multistep process. It will allow YNHHS, Vanguard and ECHN to conduct additional due diligence to review the opportunity in greater detail and negotiate a definitive agreement. When an agreement has been reached, it will be presented to the Board of Trustees for its approval. Any agreement would then need the approval of the ECHN Corporators. Federal and state regulatory approvals would then be needed including approvals from the Connecticut Department of Public Health and the Office of the Attorney General. The process from this point could take another 12 - 18 months.
In the meantime, the ECHN Board and senior management will continue to lead ECHN true to our mission, improving our patients’ well-being by providing high-quality, compassionate healthcare. Clinical services, health education, the provision of special care and healthcare for uninsured and underinsured patients all remain a top-priority for our entire organization.
Q. Will ECHN become a for-profit organization, and what will that mean?
A. Yes. ECHN will become a for-profit organization which means that it will pay taxes. We will continue our practice of treating all patients regardless of their ability to pay. The Partnering Workgroup spent considerable time interviewing the parties that were invited to participate in this process to understand their compatibility with our culture, our values, as well as their approach to patient care. The selection of Vanguard and YNHHS included a careful assessment of their cultures, to ensure compatibility with our approach to caring for patients and gain assurance that they are fully committed to following ECHN’s critical mission. Yale New Haven Health will remain a not-for-profit healthcare system.
Q. What will happen to the current charitable assets of ECHN Community Healthcare Foundation?
A. Donations will be used for the intentions in which they were given at ECHN. Temporarily restricted assets for a particular department, program, or service will be utilized to fulfill the donor’s intention of that contribution. Charitable contributions fall under the jurisdiction of the Attorney General’s office for the state of Connecticut, so, if the full amount of the restricted donation cannot be used, the Attorney General will direct any remaining assets to continue their charitable purposes through another nonprofit community foundation.
Q. Until a definitive asset purchase agreement is signed, will I still be able to contribute to the ECHN Community Healthcare Foundation?
A. Yes. The ECHN Foundation continues to rely on philanthropic support as long as it enjoys the legal status of an established 501(c)3 non-profit organization and until the date of a closing transaction between ECHN and Vanguard Health Systems. This date is anticipated to be in the final months of 2014 or the beginning of 2015 pending all regulatory approvals. All contributions will continue to be acknowledged with a tax-deductible receipt and are deductible to the fullest extent of the law.

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