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16 HARTFORDBUSINESS.COM | NOVEMBER 25 2024 Office of Health Strategy Commissioner Deidre Gifford said Connecticut's aging population will likely increase the need for chronic disease hospital care in the state. HBJ PHOTO | STEVE LASCHEVER Silver Tsunami As population ages, CT's chronic disease hospital sector set to double in size with new market entrants Medical Holdings, was a partner in the venture, which is projected to cost more than $33 million. PAM Health's proposed rehabilitation hospital received state approval on Aug. 9, 2023, but Waterbury Hospital backed out of the project this past January. Weeks later, PAM Health sought permission to move ahead on its own and received state approval in July. Kristen Smith, senior executive vice president and chief operating officer for PAM Health, said Prospect Medical pulled Waterbury Hospital out of the project because of its financial situation. "Given their situation with the Yale (New Haven Health) acquisition, that's what delayed our project," Smith said. She was referring to Yale New Haven Health's delayed bid to acquire Prospect-owned Waterbury, Manchester Memorial and Rockville General hospitals, which has since become mired in a contentious court battle. Catalyst subsequently received site plan approval in 2023 from the city of Waterbury to construct the facility, which will be located just off I-84. Smith said PAM Health doesn't need a partner to open the facility, which will be called the PAM Health Rehabilitation Hospital of Waterbury. "There aren't any issues because we don't have a formal partnership," she said. "The patients are still there, with or without a partner." Demographic shift Not all chronic disease hospi- tals are the same. They exist in subcategories. PAM Health in Waterbury has been licensed to operate what's known as an inpatient rehabilitation facility, or IRF. It will offer rehabilitative and ther- apeutic care for patients who have suffered a severe injury or illness — like a stroke, brain injury, neurological disease, cancer, trauma, etc. — and need to remain in the hospital for an extended period, generally two to three weeks. IRF patients require at least three hours of physical, occupa- tional or speech therapy for five consecutive days. The state's two existing chronic disease hospitals — Gaylord and HFSC — are considered long-term acute care hospitals (LTACHs), serving patients who need closely managed medical care over a longer period, typically lasting three to four weeks. This includes post-surgical patients, particularly those who require help to breathe. Most post-acute care in the state is provided by nursing homes and home health agencies, which offer much less intensive services, while a tinier subset of patients gets discharged to IRFs or long-term acute care hospitals. Even still, Connecticut's changing demographics likely will increase the need for chronic disease care in the By David Krechevsky davidk@hartfordbusiness.com A recent land sale in Water- bury's East End has set the stage for a noteworthy increase in the number of licensed, independent chronic disease hospi- tals actively operating in Connecticut. That increase? From two to three. A fourth is also on the way. According to the Office of Legis- lative Research, chronic disease hospitals are long-term care institu- tions with facilities, medical staff and all necessary personnel to diagnose, care for and treat a wide range of severe injuries and illnesses like a stroke, neurological disease, brain or spinal cord injury and amputations, among others. While Connecticut has 26 acute- care hospitals, it currently has just two active, independent chronic disease hospitals — the 137-bed Gaylord Hospital in Wallingford and the 231-bed Hospital for Special Care (HFSC) in New Britain. They will soon be joined by a new market entrant, Pennsylvania-based PAM Health, which will operate a 42-bed chronic disease hospital to be built on that recently sold 4.5-acre Waterbury parcel, at the corner of Reidville Drive and Harpers Ferry Road. That new facility, along with another coming to Danbury — a 40-bed hospital being developed by Encompass Health that received state approval in April 2023 — will double the number of licensed chronic disease hospitals operating in the state. That spike, according to a state health official, serves as a sign of things to come. Not everyone, however, embraced the competition, at least initially. Both Gaylord Hospital and HFSC raised opposition to PAM Health's market entrance, arguing there would be an overlap in services. Prospect backs out In late October, Florida-based Cata- lyst Healthcare Real Estate paid $1.8 million for the Waterbury land. Catalyst is the developer that will oversee construction of a 42-bed, 55,000-square-foot inpatient reha- bilitation hospital for PAM Health. The company operates a network of more than 100 long-term acute care, physical medicine rehabilitation and behavioral health hospitals, as well as wound clinics and outpatient physical therapy sites in 16 states. PAM Health in December 2021 filed an application — known as a certificate of need — with the state Office of Health Strategy seeking permission to open its first hospital in Connecticut, and only its second in New England (the other is in Massachusetts). At the time, Waterbury Hospital, owned by California-based Prospect REHAB FACILITIES In addition to the two active chronic disease hospitals in the state — Gaylord Hospital in Wallingford and Hospital for Special Care in New Britain — the following acute-care hospitals also have inpatient rehabilitation facilities: • Danbury Hospital • Hartford Hospital • Lawrence + Memorial Hospital in New London • St. Vincent's Hospital and Medical Center in Bridgeport • Stamford Hospital • Yale New Haven Hospital Source: Office of Health Strategy Kristen Smith