Hartford HealthCare and Day Kimball Healthcare in Putnam said Thursday that the companies are in talks for an affiliation, further intensifying the wave of mergers and partnerships sweeping Connecticut’s hospitals.
The news comes just a day after Yale New Haven Health System and Lawrence + Memorial Healthcare said they had reached an agreement under which L+M would affiliate with Yale.
Day Kimball signed a letter of intent with Hartford HealthCare — the parent of Hartford Hospital and four other acute-care hospitals in the state — allowing the groups to seek a formal agreement.
For now, even without a formal agreement, Hartford HealthCare will provide Day Kimball with management support to bring down costs.
“At this point, we’re still talking through what that might entail,” said Day Kimball President and CEO Robert Smanik. “If we can participate in the Hartford HealthCare purchasing system, they as a larger group have lower purchasing costs.”
Smanik was unable to say how an affiliation would affect employment at Day Kimball, which employs 1,400, including almost 300 medical professionals at the hospital and related businesses, including a medical group and four health care centers in northeastern Connecticut.
“An affiliation with HHC would provide DKH clinicians and patients with access to HHC’s key system-wide health care service lines,” Smanik said in a written statement. “Conversely, DKH, with our unique background in rural health, will work with HHC as it continues to focus on population health improvement.”
An affiliation would strengthen Hartford HealthCare’s presence in eastern Connecticut, where it already has affiliations with Windham Hospital and Backus in Norwich. It would intensify competition with Yale New Haven if regulators approve the L+M deal.
Hartford HealthCare has been cutting staff lately, under pressure from lower Medicaid reimbursement rates and higher state taxes. On June 17, the nonprofit holding company announced that it was laying off 418 people, covering the equivalent of 335 full-time positions, and would reduce spending on goods and services by $40 million this fiscal year.
Hartford HealthCare is the largest hospital group in Connecticut by number of institutions, and the second largest, after Yale New Haven, in total revenues. Besides Hartford Hospital, Backus and Windham, it includes The Hospital of Central Connecticut in New Britain and Southington, formerly New Britain General and Bradley Memorial hospitals, and MidState Medical Center in Meriden.
Hartford HealthCare also runs rehabilitation, outpatient and senior services, physician practices and a behavioral health network. The company employs more than 18,000 people and has operating revenue of $2.5 billion a year.
If all of the merger and affiliation deals now in the works advance to completion, the state, with 29 hospitals, will have nine independent hospitals, including John Dempsey in Farmington, which is part of UConn Health.
Day Kimball Hospital, with 122 beds and $111 million in annual operating revenue, had surplus margins well below the state average in each of the past two fiscal years for which it has reported results, 2013 and 2014. In 2013, Day Kimball Healthcare had an $8.9 million loss from operations.
