Hartford Business Journal

HARTFORDBUSINESS.COM | OCTOBER 20, 2025 13 UConn Health, which operates John Dempsey Hospital in Farmington, is exploring potential affiliations or investments in Waterbury, Bristol and Day Kimball hospitals in an effort to grow its scale and improve its long-term financial outlook. Contributed Photo Hospital Overhaul UConn Health's expansion bid could reshape CT's medical landscape, shrink number of independent care providers about possible partnerships remain in the early stages but acknowledged the need to grow UConn Health's scale. "We continue to work collaboratively with all stakeholders to position the institution for greater financial indepen- dence over the long term, strengthen their clinical operations, including finding ways to enhance services, and provide more opportunities for hands-on learning for students and for research for faculty," Lamont said. Independents weigh in Vincent Capece Jr. and Patrick Charmel know a few things about independent hospitals — they've each operated one for decades. Capece is CEO of Middlesex Health in Middletown. He's worked for the organiza- tion for nearly 30 years, including the past 15 as CEO. Charmel has been CEO of Griffin Health in Derby for the past 27 years and has spent nearly four decades with the organization. Both say UConn Health affiliating with or investing in other hospitals would address only some of its financial woes. Charmel said he met with UConn Health officials two years ago to discuss strengthening the organiza- tion's financial stability. There was agreement that UConn Health needed to build a stronger patient referral base to generate more business. "It's pretty rare for hospitals in that region to be referring to UConn versus Hartford or St. Francis or even down into New Haven," he said. "If they are going to be able to sustain the organi- zation and wean themselves from the state subsidy, they are going to have to build that referral base." Gaining referrals from Bristol Hospital makes sense, he said, because it's rela- tively close to Farmington. Day Kimball, by contrast, is more than an hour away in the eastern part of the state. Expanding also would give UConn Health greater leverage to negotiate commercial insurance rates, Charmel said, noting that it is reimbursed at levels similar to smaller community hospitals that don't offer as many services or specialties. In fact, John Dempsey, Bristol, Day Kimball and Waterbury hospitals are four of the eight lowest-reimbursed facilities in Connecticut, according to a 2024 RAND Corp. report, suggesting all could benefit from greater scale. UConn Health has recently sought to negotiate better rates with insurers. It ended a dispute over a new multiyear contract with ConnectiCare in June, two months after the previous contract had expired. It's currently seeking higher rates in a new contract with Aetna; the existing agreement is set to expire at midnight Nov. 30. Capece said government reimburse- ment rates also present challenges for hospitals. "The reimbursement that hospitals in general get from government programs has never been sufficient to cover the cost of the services provided to Medicare and Medicaid patients." By David Krechevsky davidk@hartfordbusiness.com C onnecticut's remaining inde- pendent hospitals are dwin- dling — and the list could soon get shorter. UConn Health, which operates John Dempsey Hospital in Farmington, is exploring potential affiliations with Bristol and Day Kimball hospitals — two of the half-dozen remaining independents left in Connecticut — and a major investment in Waterbury Hospital, which has been owned by California-based Prospect Medical Holdings, the maligned private-equity firm now in Chapter 11 bankruptcy. The moves would further consol- idate the state's healthcare market while testing the limits of public involvement in hospital ownership. While state and UConn officials believe expanding UConn Health is the answer to its financial woes, other healthcare industry experts aren't as certain. They suggest that while the plan has its merits, it won't resolve some key issues faced not just by UConn Health, but by all hospitals in the state, particularly those not part of larger health systems. A question of scale The idea of UConn Health affiliating with or investing in other hospitals stems from a 2024 state-com- missioned report by healthcare investment firm Cain Brothers, which identified the state-backed hospital system's limited "operating scale" as a major factor behind its long-term financial struggles. The report said UConn Health lacks the market leverage of larger compet- itors, forcing it to spread fixed costs for billing, IT and administration over a much smaller base. Cain Brothers also cited high employee-benefit costs as the "largest reason" for the health system's lack of profitability. UConn Health operates only one hospital — John Dempsey, with about 234 beds — but also includes medical and dental schools, a faculty physician group, and various research facilities and programs. The Cain Brothers report found that the system gener- ates only about 20% of the revenue of comparable public university health systems, receives roughly 13% of its funding from the state, and recorded average annual cash-flow losses of $140 million between 2020 and 2023, though performance improved in 2024. Cain Brothers outlined several potential strategies to strengthen UConn Health's finances, including leasing or monetizing hospital space, consolidating back-office operations, or pursuing a merger or broader partner- ship with another health system. Steps have already been taken to move the process forward. The boards of both UConn and UConn Health this month approved submitting a bid to purchase Waterbury Hospital. How that or any other UConn Health deal would be structured remains unclear. The cost of any acquisition or affiliation also has not been finalized, though published reports estimate a purchase of Waterbury Hospital alone could exceed $400 million over the coming years. Gov. Ned Lamont said discussions Patrick Charmel Vin Capece Jr. CT'S REMAINING INDEPENDENT, ACUTE-CARE HOSPITAL OPERATORS STAFFED OPERATING HOSPITAL OPERATOR BEDS REVENUES Bristol Health 122 $213.3M Connecticut Children's Medical Center (Hartford) 182 $668.1M Day Kimball Healthcare (Putnam) 59 $145.5M Griffin Health Services Corp. (Derby) 89 $293.9M Middlesex Health (Middletown) 192 $535.9M Stamford Health 234 $917.5M *Total revenues are from parent companies, which also include physician groups and other services provided outside the hospital. | Source: Office of Health Strategy Continued on next page (FY 2023)

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