Saint Raphael, Yale-New Haven Hospital Merger Finalized

NEW HAVEN — At midnight, September 12, Yale-New Haven Hospital (YNHH) acquired the assets of the Hospital of Saint Raphael (HSR), becoming a single 1,519-bed hospital with two main campuses. Hospital officials signed the final closing documents Monday, culminating more than a year of planning and regulatory approvals.

“We believe that as one unified hospital, we’ll be able to enhance access to high quality health care resources in a more cost effective manner. This integration will be critical to meeting the extraordinary health care challenges that lie ahead,” said Marna P. Borgstrom, chief executive officer of Yale-New Haven Hospital.

The integration will allow YNHH to provide the region with more coordinated care, to reduce redundancy of clinical services and financial investments and to become more efficient. It also gives YNHH 511 much-needed beds and provides financial stability for the HSR campus.

While volume at most Connecticut hospitals has been flat or declining over the past several years, YNHH has seen an increase, resulting in significant capacity constraints. The acquisition allows YNHH to avoid an estimated $650 million investment in a new patient tower to address these constraints.

The transaction allows HSR to preserve a deeply-rooted legacy as an exceptional care provider and honor its traditions, while also taking on the future as part of a nationally recognized academic medical center.

“For the Hospital of Saint Raphael, the integration represents an opportunity to assure financial stability in an uncertain time. Proceeds from the $160 million transaction will allow the hospital to pay off its debt and will help address its pension liabilities,” said Christopher O’Connor, HSR president and CEO. “We are intent on making this integration go as smoothly as possible for our patients, our employees, physicians, and the community. This represents a Connecticut solution to a Connecticut challenge.”

To better prepare for the 21st Century health care landscape, HSR leaders began discussions with potential partners two years ago, including both state and national hospitals and systems; Catholic and secular, for-profit and not-for-profit companies. In March 2011, the two hospitals signed a letter of intent to explore integration, followed by a definitive agreement in September, in which YNHH agreed to purchase HSR’s assets, to invest in HSR buildings and technology, and to honor HSR’s Catholic heritage at that campus.

The Sister Anne Virginie Grimes Health Center, Saint Raphael’s 125-bed skilled nursing and short-term rehabilitation facility, is also being acquired as part of the transaction.

Both hospitals worked for the past year to minimize job losses by keeping vacant positions open and managing attrition. About 3,400 HSR employees are transitioning to positions in the Yale New Haven Health System. Additionally, 400 members of the HSR medical staff have been newly credentialed as members of the YNHH medical staff.

“The integration has the opportunity to increase quality outcomes and provide better access to the entire continuum of care for patients,” said Peter N. Herbert, MD, YNHH chief of staff and senior vice president of medical affairs. “Care will be better coordinated as clinical information and data will be accessible to all patients and providers though a new, state-of-the-art integrated electronic medical record system.”

Following the signing of the definitive agreement, there was a months-long approval process that included the Connecticut Attorney General, the Federal Trade Commission and Connecticut Office of Health Care Access (OHCA). Local and state elected officials, community leaders and regional businesses were overwhelmingly supportive of the integration.