The Office of Health Strategy held a public hearing on Wednesday for a proposed merger between Northwell Health, a large New York-based health system, and Nuvance Health, which owns Danbury, Norwalk, Sharon and New Milford hospitals in Connecticut, as well as three hospitals in New York.
Executives from both Nuvance and Northwell said the merger would help Nuvance recover from recent substantial financial losses. In fiscal year 2024, Nuvance reported a $99 million deficit, which the health system chalked up to, among other factors, increasing costs and the aftereffects of the COVID-19 pandemic.
“Nuvance Health today finds itself at an inflection point where continuing its current course threatens the long-term viability of our facilities and programs and the future of health care in Western Connecticut,” stated John Murphy, a physician and the chief executive officer of Nuvance Health, in pre-filed testimony. “We firmly believe the time has come to join a larger health system.”
In Connecticut, providers must obtain a state approval, known as a certificate of need, before making substantial changes in the health care sector, such as mergers, large purchases of equipment or facilities, or shuttering services. The public hearing is just one step in what can be a lengthy process, particularly for complex deals involving multiple hospitals.
For example, the public hearing for the acquisition of three Prospect Medical Holdings-owned Connecticut hospitals by Yale New Haven Health took place in April 2023, but OHS did not grant final approval of the transaction until nearly a year later.
Northwell Health is the largest employer in New York state, according to the company’s website, and owns 21 hospitals and 900 ambulatory sites. The health system does not currently own any hospitals outside of New York.
Executives from Northwell Health spoke at the public hearing about the health system’s track record of acquiring and investing in struggling hospitals, and committed to making a $1 billion investment in Nuvance’s facilities over five years to support a spectrum of capital projects and the implementation of the EPIC electronic medical record.
Mark Solazzo, the chief operating officer at Northwell Health, said that the company intends to address financial challenges at Nuvance by, among other tactics, increasing staff retention, reducing reliance on outsourced contractors and driving down costs through collective purchasing.
“We have never closed a hospital, and we don’t intend to,” said Solazzo, addressing concerns that health care consolidation — the trend of big health systems buying up hospitals — has been shown to lead to cuts in critical services, as well as higher prices.
Several members of the public testified in support of the deal, expressing hope that Northwell could help strengthen the Connecticut hospitals. Those testifying included many Nuvance employees, as well as members of Save Sharon Hospital, a community group that has fought against service cuts at Sharon Hospital, including the proposed closure of the labor and delivery unit, which was denied by the state earlier this year. In August, Northwell reached an agreement with Attorney General William Tong to maintain labor and delivery services at Sharon Hospital for the next five years.
Rep. Maria Horn, D-Salisbury, offered testimony, expressing the reasons why she felt the merger was in the best interest of her constituents, as well as others around the state.
“One is Northwell’s demonstrated record of investment in community hospitals and enabling them to thrive, some of them in quite difficult conditions,” Horn said. “Two is the approach that Northwell has already taken to beginning this conversation with the community.”
According to members of Save Sharon Hospital who testified, Northwell executives, including Solazzo, met with them several times to hear their concerns and drafted up a letter of commitments, which included maintaining the labor and delivery unit, 24/7 surgical capability and a full service emergency department, while expanding services, like pediatrics and primary care. Residents encouraged OHS to incorporate those commitments into the agreed settlement if the deal gets approved.
Lydia Moore, the president of Save Sharon Hospital, expressed hope that the merger could improve health care delivery in the northwest corner of the state.
“This is the fourth time I have provided public comment before OHS at a hearing regarding Sharon Hospital, but this is the first time that I’m cautiously optimistic — dare I say, hopeful — about the future of health care in my community,” Moore said.