Public hearing held on L&M plan to merge with Yale-New Haven

R.I. ATTORNEY GENERAL PETER F. KILMARTIN and R.I. Department of Health Director Dr. Nicole Alexander-Scott recently heard testimony concerning the proposed merger of Westerly Hospital's parent company and Yale-New Haven Health. / PBN PHOTO/NANCY KIRSCH
R.I. ATTORNEY GENERAL PETER F. KILMARTIN and R.I. Department of Health Director Dr. Nicole Alexander-Scott recently heard testimony concerning the proposed merger of Westerly Hospital's parent company and Yale-New Haven Health. / PBN PHOTO/NANCY KIRSCH

WESTERLY – “Approve” was the unanimous watchword of those who spoke before members of the Office of the Attorney General and the R.I. Department of Health at a public hearing in Westerly’s Town Hall. The Aug. 2 meeting was held, as required by state regulations, to hear public comments on the proposed merger between Yale-New Haven Health Services Corp., Lawrence + Memorial Corp. and LMW Healthcare Inc., d/b/a Westerly Hospital.

A panel that included Attorney General Peter F. Kilmartin and Department of Health Director Dr. Nicole Alexander-Scott heard from several witnesses, but asked no questions.

In opening the meeting, attended by some 30 or so individuals, Kilmartin acknowledged the significance of this matter to residents of Westerly and the surrounding area. “A couple of years ago, we were talking about the initial merger between L+M and Westerly; it’s a path we’ve been down before.”

The motivation to pursue this affiliation is driven by flat Medicare reimbursements, reduced Medicaid reimbursements in Connecticut, new payment models tied to patient outcomes and, down the road, the anticipated advent of population health models, according to hospital officials.
L+M realized it lacked the fiscal resources and analytical tools to effectively participate in this emerging new landscape, said Bruce Cummings, LMW Healthcare president. With a growing difficulty in recruiting physicians to Westerly and New London – in part due to an anticipated shortfall by 2020 of 100,000 physicians nationwide – L+M approached Yale-New Haven, with which it has a long history of clinical relationships, about affiliating. By being part of a regional entity with better access to capital and improved ability to recruit doctors, L+M believed it would enhance its ability to serve its patients, Cummings said.

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“Westerly Hospital has a parent – LMW Healthcare,” said Cummings. “If [this merger is] approved, Westerly Hospital will have a grandparent – Yale-New Haven.” He explained that L+M is the parent organization of four nonprofit health care organizations: L+M Hospital in New London, Westerly Hospital, VNA of Southeastern Connecticut and its medical practice foundation, L+M Medical Group, as well as one for-profit entity that provides malpractice insurance for the health care system, L+M Indemnity.
The hospitals have separate boards, medical staffs, tax IDs and collective bargaining agreements, said Cummings. Should the merger be approved, names of the hospital entities, their governing bodies, medical staffs, licensures and union contracts would remain exactly as they are today, he said, though they would become a member organization of the Yale-New Haven Health Services Corp., which includes Greenwich, Bridgeport and Yale-New Haven hospitals and its medical foundation, Northeast Medical Group. Connecticut law requires that the medical groups merge into one entity, he said, so Northeast Medical Group would be the surviving entity, though L+M Medical Group’s offices, services and clinicians would remain unchanged, but for its name.

Tricia Barber, a Westerly Hospital nurse and United Nurses and Allied Professionals representative; Jean Gagnier, a member of the Westerly Town Council and former Westerly Hospital patient; Ken DeLorenzo, a UNAP employee; Ocean Community Chamber of Commerce President Lisa Konicki, a former employee of Westerly Hospital; State Senate Minority Leader Dennis Algiere, R-Westerly, State Rep. Sam Azzinaro, D-Westerly, and Westerly Town Manager Derrik Kennedy all urged, without reservation, that the merger be approved.

Overwhelming pressures and trends nationwide throughout the health care industry, said DeLorenzo, are leading to affiliations and consolidations here and across the country. “We wish these trends didn’t exist, but [they do],” he said. “The question today is … what’s the best way for L+M and Westerly [Hospital] to address these overwhelming pressures?”
Other alternatives, including for-profit entities such as Prospect Medical Holdings and Prime Health Care, concern DeLorenzo. Both are aggressively expanding into the East Coast and neither has Yale-New Haven’s strong reputation. Acknowledging that some individuals have expressed concerns (though not at this hearing), he recommended addressing those concerns within the affiliation, rather than killing the affiliation and taking a chance with another entity down the road.

“When you have an opportunity to grab onto something that’s going to make life better for everyone in our town … you need to grab it and run with it,” said Azzinaro. “When Westerly [Hospital] was taken over by L+M, it was a godsend that it happened. … Please, in your great wisdom, make this happen.”

Officials from the Department of Health and the Office of Attorney General will review the proposed merger after the comment period ends, effective Aug. 9. They will make a recommendation to Alexander-Scott, who is expected to issue a decision in the next few weeks. Connecticut, too, is evaluating the proposed merger.

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