Yale New Haven Hospital and Hospital of Saint Raphael to explore integration

3/25/2011 — Yale New Haven Hospital (YNHH) and the Hospital of Saint Raphael (HSR) have announced the approval of a Letter of Intent (LOI) by both organizations' Boards of Trustees to explore the potential integration of the two hospitals. The LOI defines an approach that would enhance healthcare quality, access and efficiency for greater New Haven and the broader region.

Under the language of the LOI, Yale New Haven would purchase the assets of the Hospital of Saint Raphael, producing one integrated hospital with continued access to care at both campuses.

The signing of the LOI represents the first of multiple steps in an extended approval process. It will allow both YNHH and HSR to review the opportunity in greater depth. Should there be agreement to move forward after appropriate due diligence is completed, a Definitive Agreement would be signed which would initiate a broader regulatory review of the transaction by appropriate state and federal agencies.

"This is a very challenging time for the healthcare industry," said Marna P. Borgstrom, president and CEO of YNHH. "With the prospects of significant healthcare changes on the horizon, hospitals across the nation are exploring innovative ways to enhance access to high quality care while driving down costs. Integrating services between Yale New Haven and Saint Raphael's would provide a unique opportunity to achieve those goals."

"The proposed integration is in the best interest of this community, our patients and our two organizations," said Christopher M. O'Connor, president and CEO of HSR. "While the Letter of Intent is the first of many steps, we believe this proposal provides the opportunity to better serve the region by transforming and improving the delivery of healthcare in the true tradition of our respective missions. It would also bring financial stability to Saint Raphael's, and help Yale New Haven address capacity issues by better utilizing both campuses."

The terms of the LOI would ensure that the Hospital of Saint Raphael's Catholic heritage would continue to be honored at that campus, with medical care provided consistent with the Ethical and Religious Directives for Catholic Health Care Services. "The Sisters of Charity of Saint Elizabeth, as Saint Raphael's sponsors, are in full support of exploring the proposed integration with YNHH because it focuses on ensuring continued access to excellent care for this community, and would respect the tradition of faith-based care consistent with Catholic teaching at the Saint Raphael campus," said Sister Maureen Shaughnessy, general superior of the Sisters of Charity of Saint Elizabeth and chairperson of HSR's Board of Trustees.

The LOI envisions a two-campus hospital that would deliver sophisticated care across a wide spectrum of primary and specialty services. Significant cost and operational efficiencies would be created by reducing the redundancy of future clinical and capital investments, and by better coordinating care. In addition, by creating an integrated delivery network, the region would be well-prepared to manage the changes inherent in healthcare reform. Under the proposal, YNHH would invest an estimated $135 million in capital improvements on the HSR Campus.

Because YNHH intends to grow clinical services on the Saint Raphael Campus if the integration proposal is approved, it is expected that the majority of Saint Raphael employees would become part of the newly combined hospital. It is anticipated that their pay and benefits would be consistent with those currently provided to YNHH employees in similar roles. YNHH would also provide the necessary funding to meet certain liabilities associated with the HSR frozen pension plan, and would recognize the Teamsters as the bargaining agent for currently represented HSR employees.

"The proposed integration would provide the opportunity to optimize care in the region, by coordinating the use of best clinical practices across all care venues, improving availability of clinical expertise and increasing access to technology, research and clinical trials for all of the patients that we serve," said Peter Herbert, MD, chief medical officer of YNHH. Alan Kliger, MD, Saint Raphael's chief medical officer, agreed, adding, "We believe this would give our exceptional physicians, nurses and support staff the opportunity to continue delivering high quality care without the financial pressures we now face. In short, we would all benefit from the synergies of combining two outstanding healthcare facilities."

"It is important to remember that this is the first of many steps in exploring this transaction. In the coming months, there is much work to be done before an agreement would be finalized," Borgstrom said, adding, "We will share updates with our employees, medical staff, patients and the broader community as we have them."

"We are truly excited about this first step towards possible integration between these two exceptional organizations, which will enable us to better serve those in need," O'Connor said.

Yale New Haven Hospital (YNHH), part of Yale New Haven Health, is a nationally recognized, 1,541-bed, not-for-profit hospital serving as the primary teaching hospital for the Yale School of Medicine (YSM). Founded as the fourth voluntary hospital in the U.S. in 1826, today, YNHH has two New Haven-based campuses, and also includes Yale New Haven Children's Hospital, Yale New Haven Psychiatric Hospital and Smilow Cancer Hospital. YNHH has received Magnet designation from the American Nurses Credentialing Center, the nation’s highest honor of nursing excellence. YNHH has a combined medical staff of about 4,500 university and community physicians practicing in more than 100 specialties. www.ynhh.org