September 28, 2011
YALE-NEW HAVEN HOSPITAL, SAINT RAPHAEL’S AGREE TO MERGER
By Ed Stannard, New Haven Register
NEW HAVEN — Yale-New Haven Hospital and the Hospital of Saint Raphael have agreed to merge into one hospital with two campuses, according to a statement issued by Yale-New Haven.
The two hospitals have signed an agreement in which Y-NH will buy St. Raphael’s assets for $160 million, according to Y-NH Vice President Vincent Petrini. The proposed merger now will undergo review by regulatory agencies, the state Office of Health Care Access and the Federal Trade Commission, as well as the attorney general’s office.
“Since we announced the letter of intent in March to integrate the two hospitals, we have been encouraged by the broad-based support from the community for this proposal,” Marna P. Borgstrom, president and CEO of Y-NH, said in a statement.
“From elected, regional and business leaders, employees, physicians and patients, there has been excitement for what this will mean for the future of health care in our community and the region.”
Christopher M. O’Connor, president and CEO of St. Raphael’s, called the agreement “a significant milestone towards realizing opportunities to better serve and care for Greater New Haven and the broader region.
“By signing the definitive agreement, both hospitals have concluded that this integration can succeed in the new healthcare environment and is in the best interests of both organizations, and the communities and the region we serve.”
According to the agreement:
Yale-New Haven will purchase St. Raphael’s assets.
St. Raphael’s will continue to follow Roman Catholic ethical and religious directives for health care. Those include end-of-life and reproductive care, according to Geri Johnson-Reis, a spokeswoman for St. Raphael’s.
Y-NH will take on St. Raphael’s $75 million debt, Johnson-Reis said. It also will provide an undetermined sum “to help address its Church Plan pension shortfall,” the statement said.
Y-NH will invest in St. Raphael’s campus and increase clinical care there. The hospital previously has said it would spend $135 million on the Chapel Street facilities.
Petrini said the merger makes sense for Y-NH because that hospital is limited in its ability to easily expand its campus. “It avoids the need to invest in, for example, a new patient tower,” which could cost $400 million, he said.
The announcement in March that the two nonprofit hospitals were seeking to merge said the “majority” of St. Raphael’s 4,000 workers would be part of the combined hospital and that their pay and benefits “would be consistent with those currently provided to Y-NH employees in similar roles.” Yale-New Haven has 8,700 employees.
Johnson-Reis said she could not say how many jobs might be lost in the merger. “They’re not at that point. The definitive agreement is really at a much higher level than that,” she said.
Petrini said the two hospitals have more than 1,000 vacancies between them, and Y-NH would try to fill those with employees whose jobs overlap with the other institution’s, for example in the business and administrative offices, “to make sure we can minimize any job impacts.”
The sale of St. Raphael’s, a 511-bed hospital founded by the Sisters of Charity of Saint Elizabeth in 1907, would have to be approved by the Archdiocese of Hartford and the Vatican.
The hospital that would become Yale-New Haven, now with 966 beds and including a children’s hospital and a cancer hospital, was founded in 1826.
State Rep. Patricia Dillion, D-New Haven, called the planned merger “the end of an era” and said that while she was happy Y-NH has agreed to absorb St. Raphael’s debt and honor the union contract, she worried about the underlying issue of where New Haven jobs will come from in the future.
She said St. Raphael’s is an anchor for that part of New Haven and it needs to continue its robust presence, with potential federal cuts threatening Catholic hospitals.
Dillon said she did not think the state did all it could in terms of policies and reimbursements to help St. Raphael’s over the years, “although this may have happened anyways.”