Public Health Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-811

Title:

AN ACT CONCERNING PARITY IN HOSPITAL SALES OVERSIGHT.

Vote Date:

3/27/2015

Vote Action:

Joint Favorable

PH Date:

3/11/2015

File No.:

655

SPONSORS OF BILL:

Public Health Committee

Sen. Looney, 11th Dist.

Sen. Fasano, 34th Dist.

REASONS FOR BILL:

The bill extends to all hospital sales the current approval process that applies to sales of non-profits to for-profits. Under that process, the hospital and purchaser must apply to the Department of Public Health commissioner and Attorney General to approve the transaction, under specified criteria.

Under current law, sales of a nonprofit hospital to a nonprofit buyer or a for-profit hospital to a for-profit buyer are subject to certificate of need review, but not the same process as nonprofit conversions to for-profit status.

The bill also requires the commissioner and attorney general, in determining any conditions on the approval of a hospital sale, to weigh the value of the conditions against their potential negative impact, including the sale not occurring, on (1) the affected community's continued access to high quality and affordable health care after accounting for likely staffing level changes and (2) the provision of services to uninsured and underinsured persons.

RESPONSE FROM ADMINISTRATION/AGENCY:

Insurance Department, State of Connecticut: The Department is tasked with regulating the insurance industry in a fair and efficient manner which promotes a competitive and financially sound insurance industry in a fair manner. The Department is mindful of the cost of health insurance and its impact on consumers.

Senator Looney and Senator Fasano: This bill would create equal oversight for all hospitals consolidations. Currently, the hospital conversion process is only applied when a for-profit hospital acquires or merges with a non-profit hospital. We believe that there should be increased scrutiny when a for-profit hospital acquires or merges with for a profit hospital and when a non-profit hospital acquires or merges with a non-profit hospital.

NATURE AND SOURCES OF SUPPORT:

Frances Padilla, President, Universal Health Care Foundation of Connecticut: The Foundation supports any effort that advances its goals of a quality, affordability, quality and the ability for the entity to meet community needs. It feels that this bill may not go far enough. The Foundation feels that Connecticut should not be fearful of being seen as “anti-business” when Connecticut is protecting the health and wallets of our state's residents and employers.

Melodie Peters, President AFT Connecticut: Connecticut Statues are largely vague and inadequate to protect citizens from the impacts hospital conversions may create. Further guidance in statue on all types of hospital conversations would provide further direction to Office of the Health Care Advocate and would make the standards clear to any prospective acquirer upfront.

NATURE AND SOURCES OF OPPOSITION:

Connecticut Hospital Association (CHA): CHA opposes expanding the hospital conversion law to include all hospital sales. Under current law, the Attorney General is focused on reviewing the impact that the proposed acquisition of not-for-profit hospital will have on the charitable assets of the not-for-profit, and the potential for difference in service model. A similar review is not needed when no for-profit hospital is involved in the transaction, as there is no conversion of any charitable assets.

Reported by: Zani Imetovski

Date: 4/20/2015