Hartford Business Journal

8 Hartford Business Journal•January5,2015 www.HartfordBusiness.com 5 to Watch in 2015 Karl leads ECHN through year of uncertainty By Greg Bordonaro and Matthew Broderick gbordonaro@HartfordBusiness.com W hen Eastern Connecticut Health Network CEO Peter Karl's phone rang around 3:45 p.m. Dec. 11, little did he know the ensuing conversation would dramatically change his plans for 2015. On the other end of the line was a Tenet Healthcare Corp. executive, informing Karl and three other Connecticut hospital CEOs that the Texas, for-profit hospital operator was giving up on its Connecticut acquisitions. Tenet spent about $5 million over the last several years trying to gain a strong foothold in the state, but it backed out of purchasing ECHN's Manchester Memorial and Rockville General hospitals, as well as Bristol, Water- bury, and St. Mary's hospitals, after state regu- lators placed 47 restrictions on one of its deals, including a five-year staffing and pricing freeze. Tenet said the restrictions handed down by the Office of Health Care Access were too oner- ous to move forward with any acquisitions. "I was surprised by this," said Karl, "because I didn't realize there was so little dialogue between the Office of Health Care Access, the governor's office and Tenet from the time the [deal] conditions were released [Dec. 1]" to the time Tenet pulled out Dec. 11. Karl said he was hoping Tenet could shore up ECHN's ailing financial position that included a $2 million loss in fiscal 2014. ECHN had several suitors, but Tenet offered the sweetest deal, including a promise to eliminate $90 million in debt, $40 million in pension obligations, and make $75 million in capital improvements, Karl said. "There was no deal close to that," Karl said. With that offer off the table, ECHN faces a $3 million loss in the current fiscal year, but Karl said he doesn't anticipate any major oper- ational changes — including layoffs — in 2015, assuming that demand for services remains stable. However, the hospital network now will be working on a rolling, 12-month budget, and a big concern in two years is the network's ability to meet its bond covenants. "We have two years to get something done before I would be very concerned," Karl said. Karl said he is now moving on to plan B, which will include reviving talks with Hartford Healthcare, Yale New Haven Health System, and possibly a Massachusetts hospital network on some kind of partnership; but it will likely take all of 2015 to find a new deal, and it's unlikely they will find a partner willing to invest as much capital as Tenet, which is publicly traded and has more than $16 billion in annual revenues. He said the Office of Health Care Access, which regulates hospitals and mergers, stepped over the line with its onerous restric- tions on Tenet's Waterbury Hospital acquisi- tion, which could have added new competi- tion in a state quickly being dominated by two major health systems. "The concern is that the market is con- trolled by a couple of large institutions that are going to drive costs up," Karl said. "Tenet H ere is a look at five business, civic, and higher education leaders to watch out for in 2015. Berger-Sweeney looks to strengthen Trinity's ties to CT Inc. By Gregory Seay gseay@HartfordBusiness.com E ven before formally setting foot on campus earlier this year, the 22nd president in Trinity's 190-year history knew the breadth of the 2,300-pupil school's involvement in Hartford's South End and the greater community but the depth of those ties are just becoming more apparent to her. "I knew when I walked in the door,'' Joanne Berger-Sweeney said, "that Trinity was a strong, liberal-arts college, where staff and faculty care deeply about the students. I'm not sure I realized how involved all the members of Trinity are in the community beyond the walls and hedges." Berger-Sweeney succeeded retired Trinity head James Jones last July 1 and was formally installed as president in October. Unlike most typical colleges Joanne Berger-Sweeney was installed in October as Trinity College's 22nd president. P H O T O | C O n T R i b u T e d Continued on page 10 Continued on page 10 Eastern Connecticut Health Network CEO Peter Karl. P H O T O | P a b l O R O b l e s

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