Hartford Business Journal

HARTFORDBUSINESS.COM | MARCH 20, 2023 29 FOCUS: HEALTH CARE Hartford HealthCare is looking to take a majority ownership stake in the Litchfield Hills Surgery Center in Torrington. PHOTO | COSTAR Hartford HealthCare at forefront of outpatient surgical center expansion trend By Andrew Larson alarson@hartfordbusiness.com A s Hartford HealthCare seeks to expand its footprint in Fair- field, Windham and Litchfield counties, it's facing some pushback from nearby competitors. The second-largest healthcare system in the state — which operates seven acute-care hospitals — has been working to establish an outpa- tient surgical center in Plainfield, while seeking approvals to acquire more than 51% stakes in existing surgical centers in Torrington and Wilton. HHC is also looking to take over governance control of a Trum- bull-based surgical center. All four deals have been working their way through the state's regula- tory approval process for years. One has faced a court challenge and the majority have encountered some opposition from local surgical centers raising competitiveness concerns. Hartford HealthCare's growth in Fairfield and Litchfield counties follows its 2019 purchase of Bridge- port's St. Vincent's Medical Center. It also received approval in December 2017 to affiliate with Charlotte Hungerford Hospital, which came with a promise to invest up to $73 million in the Torrington-based care provider. Hartford HealthCare, like many health systems, has been shifting non-emergency care out of its emer- gency departments, to lower-cost urgent care and ambulatory surgery centers, as well as home-based community services, said Rebecca Stewart, HHC's vice president of content strategy. That's part of the strategy behind the ongoing surgical center deals. "This helps lower healthcare costs for all, while improving access to care," Stewart said. HHC has reduced non-emergent emergency department visits by 10% since 2016, she said. Also, nearly 40% of surgeries are now performed outside of its hospitals. Ambulatory surgical centers engender high-quality, convenient care at the most affordable cost, Stewart said. The pandemic and growth in mini- mally invasive surgeries have accel- erated hospitals' interest in acquiring surgical centers, according to a report by research firm ResearchandMar- kets.com, which projects the ambula- tory surgery centers market to grow 7.5% through 2029. Plainfield proposal In Plainfield, HHC is proposing to open an outpatient surgical facility in a 13,000-square-foot space at 584 Norwich Road that it completed in 2018, adjacent to the Hartford Health- Care Plainfield Outpatient Center. HHC said the facility will benefit the region because it will bring "enhancements in quality, patient management and reporting capabil- ities, care coordination, and access for patients," according to its program application. In addition, HHC said it will invest in technology to provide quality, cost-effective care. HHC will be the majority owner of the facility, with 49% of the interests held by physician investors and Avon- based Constitution Surgery Alliance, which develops surgical centers. It will have two operating rooms and focus on orthopedics, pain manage- ment, urology and gastroenterology. HHC plans a $5.5 million capital expenditure. The healthcare system's growth in Windham County has been opposed by Day Kimball Hospital, located in the small town of Putnam with a population of just over 7,000. Day Kimball, an independent hospital, declined to comment for this story due to pending litigation and regulatory proceedings. HHC's Plainfield Outpatient Center was originally approved in January 2021 via a settlement agreement with the Office of Health Strategy — the state's healthcare industry regu- lator — but was tripped up after Day Kimball filed a lawsuit a few months later, claiming OHS did not follow statutory requirements and because the decision was inconsistent with the evidence presented. During a March 2020 public hearing, Day Kimball, which was granted intervenor status, pointed out that the proposed surgical center overlapped with its service area. Day Kimball said OHS failed to give proper weight to evidence it presented showing the "adverse and indeed devastating impact on Day Kimball Hospital and the economy" if HHC recruits its orthopedic surgeons. It also claimed there would be a negative impact on healthcare delivery in northeastern Connecticut, including on two outpatient facili- ties in Norwich, one of which Day Kimball said has "documented excess capacity." Day Kimball estimates the proposed center would cause a 30% to 40% reduction in its outpatient surgery and endoscopy cases, resulting in a loss of $2.5 million to $3.5 million annually. Hartford HealthCare filed a motion to dismiss the case, but it was denied. The case has been remanded to OHS with the instruction to add additional evidence to the record. OHS has scheduled a new public hearing at 9:30 a.m. April 12. Partial acquisitions HHC's expansion plans also involve a joint venture between its nonprofit HHC Surgery Center Holdings arm, and Litchfield Hills Surgery Center at 245 Alvord Park Road, in Torrington. Litchfield Hills Surgery Center is currently part of Litchfield Hills Ortho- pedic Associates, an independently owned physician group. HHC Surgery Center is a holding company, affiliated with Hartford HealthCare, created for the purpose of owning interests in outpatient surgical joint ventures such as the one proposed. HHC is seeking approval to purchase a 51% stake in Litchfield Hills. The application, submitted in May 2021, is pending and OHS is drafting a decision. No members of the public testified for or against the proposal. A $2.75 million capital investment will help fund renovations, along with equipment and technology upgrades, HHC said in its project application. The physicians are mainly orthope-

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