Yale New Haven Health, one of the largest health systems in Connecticut, has finalized an agreement to acquire a set of hospitals from Los Angeles-based Prospect Medical Holdings, Inc. But there are a few more complicated details of this deal we need to run through.
Prospect Medical Holdings is selling the operations of the hospitals, related businesses, real estate assets, physician clinic operations and outpatient services of Waterbury Health, Manchester Memorial Hospital and Rockville General Hospital. However, Prospect is acquiring the real estate of those hospitals from Medical Properties Trust, Inc. (MPT) for $457 million, the approximate amount MPT paid for the hospitals in August 2019. The Prospect lessees have since made timely payments of all rent required under the leases to MPT totaling approximately $104 million. MPT plans to utilize proceeds from the transaction to reduce debt and to fund select acquisitions and other investment opportunities. The purchase price of the operations was not disclosed.
Waterbury Health (357 beds), which includes Waterbury Hospital, Alliance Medical Group, Cardiology Associates of Greater Waterbury, VNA Health at Home and Access Rehab Centers and Greater Waterbury Imaging Center, offers healthcare services including primary care, emergency and acute care and home health care. In 2020, Waterbury Hospital generated $242.7 million in revenue and $21.8 million in EBITDA.
Manchester Memorial and Rockville General are part of the Eastern Connecticut Health Network (ECHN), the former being the anchor. Manchester Memorial is a 249-bed, acute-care community hospital in Manchester, about 10 minutes east of Hartford. It generated $183.6 million in revenue in 2020 and approximately $27 million in EBITDA.
Rockville General Hospital is an acute-care community hospital in Vernon, approximately 15 minutes northeast of Hartford. That hospital has 232 beds and generated approximately $43 million in revenue with an earnings loss of $7.24 million in 2020.
ECHN also has urgent care locations and a visiting nurse association, all of which will be joining the Yale New Haven Health network. ECHN and Waterbury Health, with approximately 4,400 employees, would return to not-for-profit status.
