UConn Health — the state’s public medical center that includes the UConn School of Medicine, the School of Dental Medicine, and John Dempsey Hospital — is now at the center of Governor Ned Lamont’s plan to acquire struggling hospitals across Connecticut.
In a special session scheduled for Nov. 12 and 13, the governor is asking lawmakers to give UConn Health broad new authority to create subsidiaries and joint ventures capable of buying, operating, funding, and even selling hospitals, beginning with Waterbury Hospital.
A State Hospital System in the Making
Waterbury Hospital isn’t failing on its own. It’s collapsing under the ownership of Prospect Medical Holdings, a California based private-equity chain now in bankruptcy and attempting to unload its remaining Connecticut assets.
UConn Health has stepped forward with a opening bid of $13 million in cash and $22 million in selected debt, even though the hospital’s problems go far beyond that price tag. The plan would rewrite seven state laws to let UConn Health create new entities — under its own management — that could buy and operate hospitals independently.
These entities wouldn’t just acquire facilities. They could borrow money, finance repairs, and set their own hiring and operating policies outside the normal state system. It would amount to a major expansion of UConn Health’s role in Connecticut’s healthcare sector — and a long-term financial commitment for taxpayers.
The Bonding Mechanism Behind the Plan
The real concern isn’t the purchase price — it’s how the deal would be financed.
Under the governor’s proposal, these new hospital entities would gain access to UConn’s existing bonding authority under the UConn 2000 Act, which governs the university’s long-term construction borrowing. The plan would expand that authority to hospital acquisitions, allowing UConn Health’s subsidiaries to issue state-backed bonds not only to buy hospitals but also to fund operations, replace equipment, and make long-delayed repairs.
That means the takeover isn’t a one-time transaction — it’s a long-term state debt obligation. Every dollar borrowed would ultimately be backed by Connecticut taxpayers.
UConn Health’s Finances: In No Shape to Rescue Anyone
UConn Health’s own financial condition raises serious questions about its ability to take on additional hospitals.
According to its 2024 Annual Comprehensive Financial Report, UConn Health posted an operating loss of $433.6 million. Even before state bailouts and accounting adjustments, it was still losing $218.9 million.
The system is also burdened with $2.8 billion in total liabilities, including $2.4 billion in pension and retiree health obligations. UConn Health continues to operate only because the state covers its shortfalls every year.
By any honest measure, this is a financially distressed organization — not one in a position to absorb a bankrupt hospital.
The Waterbury Hospital Reality Check
Waterbury Hospital’s finances tell the rest of the story. The hospital’s recent filings show:
- Two consecutive years of $20 million-plus operating losses
- A –9.91% operating margin
- Roughly $140 million in unpaid bills and taxes
- Fewer than half of its licensed beds staffed
UConn Health estimates the five-year cost of the takeover at $420 million, largely through new borrowing.
Even Yale New Haven Health — the state’s largest hospital system — declined to acquire Waterbury Hospital after reviewing its financials. If Yale, with far greater resources and experience, decided it wasn’t viable, why would a loss-making public institution take it on?
And Waterbury may not be the last. State officials are reportedly in discussions to acquire Bristol Hospital and Day Kimball Hospital in Putnam — both struggling to stay afloat.
Rhode Island’s Experience: A Warning, Not a Template
Connecticut doesn’t have to look far for a cautionary tale. Rhode Island faced a similar situation when Prospect-owned hospitals there began to fail and spent years trying to prevent the collapse of Roger Williams Medical Center and Our Lady of Fatima Hospital.
Regulators there spent years trying to keep them afloat through strict oversight and conditional approvals, but the nonprofit buyer still couldn’t secure financing.
Despite all that oversight, Rhode Island’s hospitals continued to lose millions per month, and the state found itself supervising — not saving — a slow-motion collapse.
Ultimately, the state never owned the hospitals; it merely supervised their decline. Yet despite that limited role, Rhode Island still faced mounting operating losses, stalled financing, and the very real prospect of closure. Connecticut is now preparing to take on something far riskier: not supervising a failing hospital, but buying one outright.
A Well-Intentioned Plan That Ignores Fiscal Reality
Preserving healthcare access in cities like Waterbury is an important goal. No one disputes that these hospitals serve communities in need. But good intentions can’t hide the risks.
Lamont’s proposal would commit Connecticut to buying one of the most financially troubled hospitals in the state; add hundreds of millions in new bonded debt to the state’s balance sheet; expanding UConn Health far beyond its core academic and clinical mission; and entrust a financially distressed agency with managing new, complex hospital operations.
Legislators should insist on full transparency about long-term costs and UConn Health’s ability to manage additional operations. Without that, the state risks repeating Rhode Island’s mistakes — with more taxpayer money.
Connecticut has worked too hard to rebuild its fiscal footing to risk it all on a bailout disguised as a rescue.
