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Celebrate the One Year Anniversary of Brass City Market on Field Street!
Holiday Gathering & Special Night of Shopping
Friday, December 6th, from 5:00 p.m. to 7:00 p.m. 19 Field Street $10 per person
Buy tickets at the door, securely at www.BrassCityHarvestWtby.org, or by telephone at (203) 759-7171
Meet some of our artisans and agricultural producers! Sample wonderful local products!
All proceeds to support Brass City Harvest & Brass City Market on Field Street
Friday, December 6th, from 5:00 p.m. to 7:00 p.m. 19 Field Street $10 per person
Buy tickets at the door, securely at www.BrassCityHarvestWtby.org, or by telephone at (203) 759-7171
Meet some of our artisans and agricultural producers! Sample wonderful local products!
All proceeds to support Brass City Harvest & Brass City Market on Field Street
2013 Annual Christmas Tree Lighting Ceremony Downtown
Originally Posted on December 2nd, 2013
The thuds and clicks of a horse and buggy strolling by Waterbury's Downtown green was a sonic backdrop to the ceremonious murmur of a crowd of many thousands of cheerful ladies, gents, children, and tots. The musical band of an inspired holiday tradition, the visiting Santa, the Waterbury-cherished famous Frankie's Hotdogs, the doughnuts, and the hot chocolate, together a precursory to the main event. "Three ... two ... One" ... and with a sudden but expected pop and flash - on go the tens of thousands of Christmas lights strewn on the towering Christmas Tree at the center of what looked like a quaint colonial towne centre. Just about every object upon which a vine might grow, climbed strings upon strings of illuminous nodules.
The thuds and clicks of a horse and buggy strolling by Waterbury's Downtown green was a sonic backdrop to the ceremonious murmur of a crowd of many thousands of cheerful ladies, gents, children, and tots. The musical band of an inspired holiday tradition, the visiting Santa, the Waterbury-cherished famous Frankie's Hotdogs, the doughnuts, and the hot chocolate, together a precursory to the main event. "Three ... two ... One" ... and with a sudden but expected pop and flash - on go the tens of thousands of Christmas lights strewn on the towering Christmas Tree at the center of what looked like a quaint colonial towne centre. Just about every object upon which a vine might grow, climbed strings upon strings of illuminous nodules.
Waterbury Restaurants
Vintage Restaurant
Bank Street
Carmen Anthony Steak House
Chase Avenue
International Food Inc.
South Main Street
Bank Street
Carmen Anthony Steak House
Chase Avenue
International Food Inc.
South Main Street
ARCHIVED CULTURE ARTICLES
11/30/13: OPEN MARKET TODAY AT CITY HALL
An Open Market Day will take place Saturday, November 30th, 10:00 a.m. - 6:00 p.m. at Waterbury City Hall and its adjacent historic building at 193 Grand Street.
This event is completely free and open to the public. Over 50 local vendors will showcase their products, providing visitors with the opportunity to purchase work from the most talented artists in Connecticut. An assortment of seasonal tastings with refreshments will be offered, and top Connecticut food trucks will be onsite for the public's enjoyment.
The inaugural event of State of Makers is a first of its kind sponsored by CreateHereNow - an initiative of the State of Connecticut Office of the Arts, Department of Economic and Community Development, and the City of Waterbury.
State of Makers is a statewide marketing project to raise awareness of artisans and the maker's talents that exist throughout the state. This campaign will create a network of Connecticut makers, offering resources for promotion, exhibition, and commerce. Connecticut is the first to receive an ArtPlace Grant for an entire state.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
9/30/13: 120 Area Leaders Question Vanguard Takeover of Waterbury Hospital, in a 90-Minute Pounding
Okay, it was not a pounding in the aggressive sense, but it was a pounding in terms of a constant barrage of prepared and pre-scripted questions. After a much-publicized and very intensely debated hospital takeover run last year from another Texas-based company, the community is understandably more educated and curious.
In a recent meeting which was held at the University of Connecticut's Waterbury campus at 99 East Main Street, the Connecticut Community Foundation hosted a forum to discuss an ongoing proposal between Waterbury Hospital and Vanguard Health Systems. The meeting was facilitated by Paula Van Ness, President and Chief Executive Officer of the Connecticut Community Foundation. The guest speaker was Darlene Stromstad, FACHE, President and Chief Executive Officer of Waterbury Hospital. The keynote speaker was Trip Pilgrim, Senior Vice President and Chief Development Officer of Vanguard Health Systems.
According to Pilgrim, Vanguard was started in late 1998, and its founders came from both for-profit and not-for-profit backgrounds. Their foundation started as a reaction to their beliefs that health care in the United States of America, in its present form, is not sustainable. The believed that the long-held tradition of "the more you do the more you get paid" will soon be replaced by "the better your results the more you get paid"; this is referred to as the "fee for value" environment.
Their answer to the impending financial doom of the health care system lies in the economy of scale. This involves, among other things, creating regional networks, cost sharing, and centralization of departments such as clerical and human resources. Additionally, these changes will allow access to creditors and capital markets in a way that is impossible by not-for-profit organizations today. This is not exclusive to Waterbury; in fact, it is a national issue in all major municipal regions.
Pilgrim continued to explain that hospitals are extremely capital intensive. Stromstad mentioned that one robotic machine costs in excess of $2.1 million. Both Pilgrim and Stromstad gave additional examples of these high-ticket technologies, and both agreed that the state-of-the-science products and technology are essential to both the quality of care and a reduced recovery window. Pilgrim highlighted the fact that in order to provide the best tools for the caregivers, access to capital markets is essential.
Vanguard Health Systems currently has acquired ownership in 28 hospitals in the past 15 years, and they have regional networks in Phoenix Arizona, San Antonio Texas, the Rio Grande Valley, Chicago Illinois, 8 hospitals in southeast Michigan, and 3 hospitals in Massachusetts, including Worchester, Framingham, and one other.
Pilgrim addressed what he referred to as the misconception of a for-profit hospital. When they approached the 3 hospitals in San Antonio Texas, he said, they committed to "supply $200 million in capital, agreed not to close any of their hospitals, and maintain the faith-based aspects of the system". Pilgrim called all hospitals "very unique to their community", expressing that there is no one system which works everywhere and there is no one size that fits all. Hospitals are largely an extension of the communities, and therefore integral in the unique cultures of those individual communities. Pilgrim said that one of the first priorities of the company when they go in to various cities is to "protect the heritage and legacy of that local asset". Over the past 10 years, Vanguard put in over $900 million of capital into the San Antonio system, replacing one of the hospitals with a new one.
He cited similar realities in Detroit Michigan. Charity care cases have increased, and they invested $850 million there.
Pilgrim defined what it means to be "for-profit", or "investor-owned". The first distinction he mentioned is that they pay taxes (unlike the current non-profit hospitals in Waterbury now). These taxes include property taxes, sales taxes, and income taxes. Being for-profit also means that Vanguard can access the equity markets, in addition to the debt markets. Currently, the only method for Waterbury Hospital to draw from is by borrowing.
Pilgrim advised that being for-profit is not about cutting quality. He explained how reducing profit is counter-productive, and in contrast to increasing share-holder value. Vanguard, as he distinguished, is not an income-based stock company, and that it is a stock of "long-term value creation" (meaning that shareholders are seeking increasing stock value, not income). The company has never paid a dividend; this is consistent with Pilgrim's explanation. ("Income stocks", for instance, are purchased primarily for their payments back to shareholders in the form of, typically, dividends.)
Also, cutting quality will ultimately cause the best caregivers to leave the hospital, and customers will have diminished loyalty. He described that word-of-mouth will corrode their customer base and result in empty beds and an empty hospital, especially since Waterbury residents have an additional hospital at their fingertips. As the physicians leave, they will "take their patients somewhere else".
Pilgrim said that they participate in all of the national quality organizations. Medicare, CMS, and others have rules, and every state requires that hospitals must qualify to be licensed, "and there's a whole book of regs [regulations] for that". He continued to say that there is a "Joint Commission" which accredits hospitals based on an additional set of guidelines. Pilgrim noted that they must meet all of the same standards that a non-profit hospital must meet.
Pilgrim offered several examples of giving back, and investing in, "our" communities. He addressed concerns that acquisitions and mergers often result in layoffs, stating that he has never been anywhere in the country where "high-quality clinicians were not in high demand". He attempted to ease concerns by stating that Vanguard does not have busloads of hospital workers "waiting to come into Kentucky [Connecticut]". He further joked that there is no popularity among nurses to come to Connecticut to pay the cost of living here.
Pilgrim also indicated that Vanguard also has no desire to alienate "organized labor" (unions). However, Vanguard has a responsibility to create sustainable systems, and to be prepared for decades into the future. He noted that the Federal Government cut back $500 billion to hospitals, and Connecticut cut $500 million out of hospitals (although not time period was quoted).
Van Ness then addressed the pre-scripted questions which came directly from audience participants. Unless otherwise specified, the questions were addressed to, and answered by, Pilgrim:
"How is the whole community going to have a say in this venture?"
There has been a public hearing, and there will be more public hearings.
"Why change the status of Waterbury Hospital from non-profit to for-profit?"
Vanguard requires the for-profit status in order to legally access the capital markets.
"Are services going to change?"
(Stromstad answered) By definitive agreement, "we will provide the services to the community that the community wants to support".
"Is there potential for a merger attempt with Saint Mary's Hospital?"
Pilgrim alluded to an already-full plate, and implied that there is not currently an active effort toward an agreement with Saint Mary's Hospital, and that Vanguard is concentrating on Waterbury Hospital at this time.
(To Stromstad)"Who else has Waterbury Hospital been in pre-negotiations with?"
Two other companies expressed an interest, one was non-profit and the other was for-profit, one was a strong brand name and the other was a small and new company, one was local and the other is not.
"Will Vanguard invest enough money in Waterbury Hospital to make it better?"
Yes (with some explanation and clarification).
"What will the structure of the governance of Waterbury Hospital be?"
Waterbury Hospital can not be run from Nashville Tennessee. Vanguard brings scale of systems, scales of economy, and access to capital. Vanguard can not do the day-to-day running of a hospital. Capital budgets will begin locally. Vanguard will go through the strategic plan of the hospital on a local basis, and the requests for spending are "generally approved" within certain limits. 80% of primary care residents want to be employed, as opposed to self-employed.
"Will there be a line of credit established, and will that money go into the hospital or wind up in the pockets of the equity investors?"
The joint agreement precludes the use of money for anything other than its intended purpose.
"How much money will Blackstone get out of this deal?"
There is no selective payment to Blackstone or anyone else. (Blackstone is apparently a major shareholder of Vanguard.) "They sit para per su [on par with everyone] with everyone else." Pilgrim reminded the audience that the model is not a dividend model, it is an equity model. (Stromstad added) There is a minimum amount of money which must be invested in Waterbury Hospital by Vanguard within a prescribed timeframe per written agreement. She noted that Saint Vincent's Hospital in Worchester (run by Eric Wexler who trained at Waterbury Hospital) recently needed a very large free-standing cancer center; this was not part of the original agreement, but it is what they needed at this time. Saint Vincent's Hospital, via Vanguard capital investment to the hospital, was able to construct the much-needed adjunct; the hospital also purchased a gamma knife (a non-invasive tool used primarily in the treatment of brain tumors, lesions, cancers, et cetera, when surgery would be otherwise impossible) in the process - a $4 million piece of sophisticated machinery.
"Is Waterbury Hospital losing money?"
(Stromstad) Year to date (through the end of June 2013), Waterbury has lost $1.4 million; in the prior fiscal year, which ended September 2012, Waterbury Hospital posted a gain of $2 million. Between years 2006 and 2011, Waterbury Hospital lost $38 million. Waterbury Hospital must be stabilized, and has been stabilized through labor cuts and other efforts. "We can stay there, but we can not invest in those new technologies."
"How can Vanguard gain by this?"
(Repeating) There are huge benefits to scale. "We (Vanguard) have better process around revenue cycle, supply chain, human resources, intelligence technology", back office areas, and others. "We (Vanguard) love Waterbury Hospital, but our intent in Connecticut is not just with Waterbury Hospital". Vanguard has a letter of intent with Bristol Hospital, and with Eastern Connecticut Health Network in Manchester Connecticut. This will establish a stronger regional network, and will be enhanced by the recent partnership with Yale-New Haven Hospital. This will be a "geographically comprehensive and clinically comprehensive, and a clinically integrated delivery network". Waterbury Hospital will now be positioned be paid "not on how much you do but how well you do".
"Will Vanguard seek tax breaks or loop holes?"
No. (Followed by some explanation and clarification.)
"Will Waterbury Hospital have its Medicare accreditation at risk like other Vanguard facilities and will Vanguard be involved in Medicare and Medicaid fraud like in other communities?"
Vanguard has never been investigated for fraud.
"Has Vanguard been working with communities to protect the patients, the community, and the workers?"
Yes. The Attorney General has to approve the conversion of non-for-profit assets to taxable assets.
"What can you say about Vanguard strategies regarding Waterbury Hospital and are any of those strategies in contrast to the strategies of Vanguard?"
(Stromstad) Much research has been done by both organizations independently and their comparisons revealed many of the same priorities. (Per Stromstad) Vanguard said to Waterbury Hospital, "If we are the 3rd biggest site provider in the state, let us make sure that we are doing it right. Maybe we should be the 2nd largest provider."
"Will the recent community health assessment have any impact on the joint venture between Waterbury Hospital and Vanguard Health Systems?"
(Stromstad) No. Waterbury Hospital, Saint Mary's Hospital, the Department of Health, the Connecticut Community Foundation, and several other non-profit organizations worked collaboratively hired a company to do a deep dive" into what is needed in the community in terms of health care. As a community group, 5 priorities have been identified. The solutions are in process; there will be a forum regarding this on October 4th, 2013.
"Will services be cut, like what was done at other Vanguard-acquired hospitals?"
We do not cut services.
"Is Yale going to take away Waterbury Hospital patients?"
No. Yale attracts higher-end services, and will likely continue to refer lower-end services to area hospitals. "By definition, Yale is extremely expensive."
"What will happen with the volunteers and the hospital's auxiliary?
(Stromstad) We hope that the volunteers will continue to come. "That will continue." Vanguard and Waterbury Hospital has agreed that the auxiliary will continue.
"Are more layoffs coming? Is there a commitment to preserve retirement obligations?"
(Stromstad) All layoffs in the past 2 years have been about Waterbury Hospital, not Vanguard. Waterbury Hospital must be stable. The state is providing $942,000 less per month to Waterbury Hospital than it did last year. Waterbury Hospital market share has increased by 1%, but the total volume of customers has decreased by 300%. Pension liabilities for currently retired individuals will continue. "Regular" and nursing pensions will be fully funded at a price tag of $28 million. There are no other plans which have deficits.
"Will the supervision of medical residents program be maintained?"
There are over 500 students in residency programs in San Antonio Texas and those programs will continue to be funded.
(Stromstad) There is a Waterbury Hospital medical residency program at Yale-New Haven, and the other is the home residency program. Both are very important, and both have, and will continue to have adequate supervision.
"Once this deal is done, is Stromstad gone?"
(Stromstad) The decision as to who will be in management of Waterbury Hospital will be made by a joint venture of a Board of Trustees. That board will consist of 6 people who will be appointed by Waterbury Hospital Foundation, and 6 people who will be appointed by Vanguard Health Systems. Specific compensation questions were asked but remained unanswered, except to say that you can go to "the 9/90s" online to obtain the salaries of all public employees. There is no part of Stromstad's compensation hinging on the success of this deal.
"Is the Connecticut legislature reluctant to support this deal?"
The State of Connecticut is proceeding in a careful manner to ensure that there is a complete understanding of the entire deal, and the resultant implications.
"Is the Certificate of Need the final hurdle? What is the status compared to the other 2 hospitals in Connecticut?"
(Stromstad) Our deal is procedurally ahead of the other 2 deals. Waterbury Hospital is the only deal which has a certificate which has been deemed complete. The State has asked for an extension of the deadline, which is currently October 9th, 2013, because Waterbury Hospital does not have a Corporate Practice of Medicine resolution, which is required in order to the deal to pass. There also has to be a public hearing prior to their decision.
"What happens of the deal does not go through?"
(Stramstod) Other options are being considered, but the other relationships and opportunities are not nearly as good as this one.
"What relationship will the Waterbury Hospital Foundation have with Vanguard Health Systems, and is it legal to have a non-profit organization to be funded by a for-profit organization?"
Yes, it is legal. The Foundation will not be able to give funds to the hospital. However, the Foundation will continue to fund grants and take donations. A hospital is a unique asset and Vanguard wants to continue to have a great relationship with the Foundation.
What is Vanguard's relationship with Tenet?"
Tenet has 49 hospitals, and they are merging with Vanguard. The merger will bring scales of economy together, and will therefore run more efficiently. There are no shared markets between the 2 companies. The transaction is expected to close by the end of this year. There is no expectation that there will be any impact on this deal. "They cleaned out their management team back in 1993; they have a completely new management team."
Alluding to compliance problems and legal issues which Tenet has been guilty of in the past, Stromstad said that Tenet "has become the most compliant", and is now known to be very, very compliant.
To Stramstod: "How can you keep a promise for a company which you don't even work for?"
Pilgrim responded, "Because the commitments we are making here today are baked into a contract, a legally binding contract". Per due diligence, Tenet knows and understands the commitments, and has agreed to stand by them.
"Will Vanguard have defined pensions?"
No. There will be 401(k) programs, not defined benefits.
"Has Vanguard partnered in cities where the poverty rate is 20%, as it is in Waterbury?"
Yes. Detroit.
"Do current employees have to re-apply for their current job?"
(Stramstod) No, but some paperwork will need to be filled out. The Certificate of Need basically says that employees in good standing will not have to apply to Vanguard Health Systems in order to maintain their current positions.
"Will current subcontracts stay in place?"
(Stramstod) It makes sense for those contracts to stay in place. There is no plan in place to do anything else regarding these subcontracts.
"Who will make up the $3.5 million that the City will lose in State-funded Payment in leiu of Taxes (PILOT)?"
(Mayor O'Leary) Our conservative calculations suggest that, once they (the hospital) become for-profit, there will be a tremendous revenue stream for the City of Waterbury. ("Tremendous" was not defined further, and there was no mention as to whether "tremendous" approaches, meets, or exceeds the current PILOT money. Conversely, Governor Malloy has indicated several months ago that it is his intent to end the PILOT Statewide entirely.)
"Is there a willingness to meet with the Community United in order to negotiate a community benefit agreement?"
The process with the Attorney General is designed to oversee the transfer of assets.
"There is a perception that Vanguard has refused to meet with workers of the hospital and community. Is that true?"
We're meeting on the 16th! We have had meetings with about 600 employees, the Executive Committee, the Chamber of Commerce, Community Leaders, and others.
The forum ended with many thanks and edifying remarks. Everyone in the audience seemed satisfied at having the opportunity to get answers.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
An Open Market Day will take place Saturday, November 30th, 10:00 a.m. - 6:00 p.m. at Waterbury City Hall and its adjacent historic building at 193 Grand Street.
This event is completely free and open to the public. Over 50 local vendors will showcase their products, providing visitors with the opportunity to purchase work from the most talented artists in Connecticut. An assortment of seasonal tastings with refreshments will be offered, and top Connecticut food trucks will be onsite for the public's enjoyment.
The inaugural event of State of Makers is a first of its kind sponsored by CreateHereNow - an initiative of the State of Connecticut Office of the Arts, Department of Economic and Community Development, and the City of Waterbury.
State of Makers is a statewide marketing project to raise awareness of artisans and the maker's talents that exist throughout the state. This campaign will create a network of Connecticut makers, offering resources for promotion, exhibition, and commerce. Connecticut is the first to receive an ArtPlace Grant for an entire state.
-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
9/30/13: 120 Area Leaders Question Vanguard Takeover of Waterbury Hospital, in a 90-Minute Pounding
Okay, it was not a pounding in the aggressive sense, but it was a pounding in terms of a constant barrage of prepared and pre-scripted questions. After a much-publicized and very intensely debated hospital takeover run last year from another Texas-based company, the community is understandably more educated and curious.
In a recent meeting which was held at the University of Connecticut's Waterbury campus at 99 East Main Street, the Connecticut Community Foundation hosted a forum to discuss an ongoing proposal between Waterbury Hospital and Vanguard Health Systems. The meeting was facilitated by Paula Van Ness, President and Chief Executive Officer of the Connecticut Community Foundation. The guest speaker was Darlene Stromstad, FACHE, President and Chief Executive Officer of Waterbury Hospital. The keynote speaker was Trip Pilgrim, Senior Vice President and Chief Development Officer of Vanguard Health Systems.
According to Pilgrim, Vanguard was started in late 1998, and its founders came from both for-profit and not-for-profit backgrounds. Their foundation started as a reaction to their beliefs that health care in the United States of America, in its present form, is not sustainable. The believed that the long-held tradition of "the more you do the more you get paid" will soon be replaced by "the better your results the more you get paid"; this is referred to as the "fee for value" environment.
Their answer to the impending financial doom of the health care system lies in the economy of scale. This involves, among other things, creating regional networks, cost sharing, and centralization of departments such as clerical and human resources. Additionally, these changes will allow access to creditors and capital markets in a way that is impossible by not-for-profit organizations today. This is not exclusive to Waterbury; in fact, it is a national issue in all major municipal regions.
Pilgrim continued to explain that hospitals are extremely capital intensive. Stromstad mentioned that one robotic machine costs in excess of $2.1 million. Both Pilgrim and Stromstad gave additional examples of these high-ticket technologies, and both agreed that the state-of-the-science products and technology are essential to both the quality of care and a reduced recovery window. Pilgrim highlighted the fact that in order to provide the best tools for the caregivers, access to capital markets is essential.
Vanguard Health Systems currently has acquired ownership in 28 hospitals in the past 15 years, and they have regional networks in Phoenix Arizona, San Antonio Texas, the Rio Grande Valley, Chicago Illinois, 8 hospitals in southeast Michigan, and 3 hospitals in Massachusetts, including Worchester, Framingham, and one other.
Pilgrim addressed what he referred to as the misconception of a for-profit hospital. When they approached the 3 hospitals in San Antonio Texas, he said, they committed to "supply $200 million in capital, agreed not to close any of their hospitals, and maintain the faith-based aspects of the system". Pilgrim called all hospitals "very unique to their community", expressing that there is no one system which works everywhere and there is no one size that fits all. Hospitals are largely an extension of the communities, and therefore integral in the unique cultures of those individual communities. Pilgrim said that one of the first priorities of the company when they go in to various cities is to "protect the heritage and legacy of that local asset". Over the past 10 years, Vanguard put in over $900 million of capital into the San Antonio system, replacing one of the hospitals with a new one.
He cited similar realities in Detroit Michigan. Charity care cases have increased, and they invested $850 million there.
Pilgrim defined what it means to be "for-profit", or "investor-owned". The first distinction he mentioned is that they pay taxes (unlike the current non-profit hospitals in Waterbury now). These taxes include property taxes, sales taxes, and income taxes. Being for-profit also means that Vanguard can access the equity markets, in addition to the debt markets. Currently, the only method for Waterbury Hospital to draw from is by borrowing.
Pilgrim advised that being for-profit is not about cutting quality. He explained how reducing profit is counter-productive, and in contrast to increasing share-holder value. Vanguard, as he distinguished, is not an income-based stock company, and that it is a stock of "long-term value creation" (meaning that shareholders are seeking increasing stock value, not income). The company has never paid a dividend; this is consistent with Pilgrim's explanation. ("Income stocks", for instance, are purchased primarily for their payments back to shareholders in the form of, typically, dividends.)
Also, cutting quality will ultimately cause the best caregivers to leave the hospital, and customers will have diminished loyalty. He described that word-of-mouth will corrode their customer base and result in empty beds and an empty hospital, especially since Waterbury residents have an additional hospital at their fingertips. As the physicians leave, they will "take their patients somewhere else".
Pilgrim said that they participate in all of the national quality organizations. Medicare, CMS, and others have rules, and every state requires that hospitals must qualify to be licensed, "and there's a whole book of regs [regulations] for that". He continued to say that there is a "Joint Commission" which accredits hospitals based on an additional set of guidelines. Pilgrim noted that they must meet all of the same standards that a non-profit hospital must meet.
Pilgrim offered several examples of giving back, and investing in, "our" communities. He addressed concerns that acquisitions and mergers often result in layoffs, stating that he has never been anywhere in the country where "high-quality clinicians were not in high demand". He attempted to ease concerns by stating that Vanguard does not have busloads of hospital workers "waiting to come into Kentucky [Connecticut]". He further joked that there is no popularity among nurses to come to Connecticut to pay the cost of living here.
Pilgrim also indicated that Vanguard also has no desire to alienate "organized labor" (unions). However, Vanguard has a responsibility to create sustainable systems, and to be prepared for decades into the future. He noted that the Federal Government cut back $500 billion to hospitals, and Connecticut cut $500 million out of hospitals (although not time period was quoted).
Van Ness then addressed the pre-scripted questions which came directly from audience participants. Unless otherwise specified, the questions were addressed to, and answered by, Pilgrim:
"How is the whole community going to have a say in this venture?"
There has been a public hearing, and there will be more public hearings.
"Why change the status of Waterbury Hospital from non-profit to for-profit?"
Vanguard requires the for-profit status in order to legally access the capital markets.
"Are services going to change?"
(Stromstad answered) By definitive agreement, "we will provide the services to the community that the community wants to support".
"Is there potential for a merger attempt with Saint Mary's Hospital?"
Pilgrim alluded to an already-full plate, and implied that there is not currently an active effort toward an agreement with Saint Mary's Hospital, and that Vanguard is concentrating on Waterbury Hospital at this time.
(To Stromstad)"Who else has Waterbury Hospital been in pre-negotiations with?"
Two other companies expressed an interest, one was non-profit and the other was for-profit, one was a strong brand name and the other was a small and new company, one was local and the other is not.
"Will Vanguard invest enough money in Waterbury Hospital to make it better?"
Yes (with some explanation and clarification).
"What will the structure of the governance of Waterbury Hospital be?"
Waterbury Hospital can not be run from Nashville Tennessee. Vanguard brings scale of systems, scales of economy, and access to capital. Vanguard can not do the day-to-day running of a hospital. Capital budgets will begin locally. Vanguard will go through the strategic plan of the hospital on a local basis, and the requests for spending are "generally approved" within certain limits. 80% of primary care residents want to be employed, as opposed to self-employed.
"Will there be a line of credit established, and will that money go into the hospital or wind up in the pockets of the equity investors?"
The joint agreement precludes the use of money for anything other than its intended purpose.
"How much money will Blackstone get out of this deal?"
There is no selective payment to Blackstone or anyone else. (Blackstone is apparently a major shareholder of Vanguard.) "They sit para per su [on par with everyone] with everyone else." Pilgrim reminded the audience that the model is not a dividend model, it is an equity model. (Stromstad added) There is a minimum amount of money which must be invested in Waterbury Hospital by Vanguard within a prescribed timeframe per written agreement. She noted that Saint Vincent's Hospital in Worchester (run by Eric Wexler who trained at Waterbury Hospital) recently needed a very large free-standing cancer center; this was not part of the original agreement, but it is what they needed at this time. Saint Vincent's Hospital, via Vanguard capital investment to the hospital, was able to construct the much-needed adjunct; the hospital also purchased a gamma knife (a non-invasive tool used primarily in the treatment of brain tumors, lesions, cancers, et cetera, when surgery would be otherwise impossible) in the process - a $4 million piece of sophisticated machinery.
"Is Waterbury Hospital losing money?"
(Stromstad) Year to date (through the end of June 2013), Waterbury has lost $1.4 million; in the prior fiscal year, which ended September 2012, Waterbury Hospital posted a gain of $2 million. Between years 2006 and 2011, Waterbury Hospital lost $38 million. Waterbury Hospital must be stabilized, and has been stabilized through labor cuts and other efforts. "We can stay there, but we can not invest in those new technologies."
"How can Vanguard gain by this?"
(Repeating) There are huge benefits to scale. "We (Vanguard) have better process around revenue cycle, supply chain, human resources, intelligence technology", back office areas, and others. "We (Vanguard) love Waterbury Hospital, but our intent in Connecticut is not just with Waterbury Hospital". Vanguard has a letter of intent with Bristol Hospital, and with Eastern Connecticut Health Network in Manchester Connecticut. This will establish a stronger regional network, and will be enhanced by the recent partnership with Yale-New Haven Hospital. This will be a "geographically comprehensive and clinically comprehensive, and a clinically integrated delivery network". Waterbury Hospital will now be positioned be paid "not on how much you do but how well you do".
"Will Vanguard seek tax breaks or loop holes?"
No. (Followed by some explanation and clarification.)
"Will Waterbury Hospital have its Medicare accreditation at risk like other Vanguard facilities and will Vanguard be involved in Medicare and Medicaid fraud like in other communities?"
Vanguard has never been investigated for fraud.
"Has Vanguard been working with communities to protect the patients, the community, and the workers?"
Yes. The Attorney General has to approve the conversion of non-for-profit assets to taxable assets.
"What can you say about Vanguard strategies regarding Waterbury Hospital and are any of those strategies in contrast to the strategies of Vanguard?"
(Stromstad) Much research has been done by both organizations independently and their comparisons revealed many of the same priorities. (Per Stromstad) Vanguard said to Waterbury Hospital, "If we are the 3rd biggest site provider in the state, let us make sure that we are doing it right. Maybe we should be the 2nd largest provider."
"Will the recent community health assessment have any impact on the joint venture between Waterbury Hospital and Vanguard Health Systems?"
(Stromstad) No. Waterbury Hospital, Saint Mary's Hospital, the Department of Health, the Connecticut Community Foundation, and several other non-profit organizations worked collaboratively hired a company to do a deep dive" into what is needed in the community in terms of health care. As a community group, 5 priorities have been identified. The solutions are in process; there will be a forum regarding this on October 4th, 2013.
"Will services be cut, like what was done at other Vanguard-acquired hospitals?"
We do not cut services.
"Is Yale going to take away Waterbury Hospital patients?"
No. Yale attracts higher-end services, and will likely continue to refer lower-end services to area hospitals. "By definition, Yale is extremely expensive."
"What will happen with the volunteers and the hospital's auxiliary?
(Stromstad) We hope that the volunteers will continue to come. "That will continue." Vanguard and Waterbury Hospital has agreed that the auxiliary will continue.
"Are more layoffs coming? Is there a commitment to preserve retirement obligations?"
(Stromstad) All layoffs in the past 2 years have been about Waterbury Hospital, not Vanguard. Waterbury Hospital must be stable. The state is providing $942,000 less per month to Waterbury Hospital than it did last year. Waterbury Hospital market share has increased by 1%, but the total volume of customers has decreased by 300%. Pension liabilities for currently retired individuals will continue. "Regular" and nursing pensions will be fully funded at a price tag of $28 million. There are no other plans which have deficits.
"Will the supervision of medical residents program be maintained?"
There are over 500 students in residency programs in San Antonio Texas and those programs will continue to be funded.
(Stromstad) There is a Waterbury Hospital medical residency program at Yale-New Haven, and the other is the home residency program. Both are very important, and both have, and will continue to have adequate supervision.
"Once this deal is done, is Stromstad gone?"
(Stromstad) The decision as to who will be in management of Waterbury Hospital will be made by a joint venture of a Board of Trustees. That board will consist of 6 people who will be appointed by Waterbury Hospital Foundation, and 6 people who will be appointed by Vanguard Health Systems. Specific compensation questions were asked but remained unanswered, except to say that you can go to "the 9/90s" online to obtain the salaries of all public employees. There is no part of Stromstad's compensation hinging on the success of this deal.
"Is the Connecticut legislature reluctant to support this deal?"
The State of Connecticut is proceeding in a careful manner to ensure that there is a complete understanding of the entire deal, and the resultant implications.
"Is the Certificate of Need the final hurdle? What is the status compared to the other 2 hospitals in Connecticut?"
(Stromstad) Our deal is procedurally ahead of the other 2 deals. Waterbury Hospital is the only deal which has a certificate which has been deemed complete. The State has asked for an extension of the deadline, which is currently October 9th, 2013, because Waterbury Hospital does not have a Corporate Practice of Medicine resolution, which is required in order to the deal to pass. There also has to be a public hearing prior to their decision.
"What happens of the deal does not go through?"
(Stramstod) Other options are being considered, but the other relationships and opportunities are not nearly as good as this one.
"What relationship will the Waterbury Hospital Foundation have with Vanguard Health Systems, and is it legal to have a non-profit organization to be funded by a for-profit organization?"
Yes, it is legal. The Foundation will not be able to give funds to the hospital. However, the Foundation will continue to fund grants and take donations. A hospital is a unique asset and Vanguard wants to continue to have a great relationship with the Foundation.
What is Vanguard's relationship with Tenet?"
Tenet has 49 hospitals, and they are merging with Vanguard. The merger will bring scales of economy together, and will therefore run more efficiently. There are no shared markets between the 2 companies. The transaction is expected to close by the end of this year. There is no expectation that there will be any impact on this deal. "They cleaned out their management team back in 1993; they have a completely new management team."
Alluding to compliance problems and legal issues which Tenet has been guilty of in the past, Stromstad said that Tenet "has become the most compliant", and is now known to be very, very compliant.
To Stramstod: "How can you keep a promise for a company which you don't even work for?"
Pilgrim responded, "Because the commitments we are making here today are baked into a contract, a legally binding contract". Per due diligence, Tenet knows and understands the commitments, and has agreed to stand by them.
"Will Vanguard have defined pensions?"
No. There will be 401(k) programs, not defined benefits.
"Has Vanguard partnered in cities where the poverty rate is 20%, as it is in Waterbury?"
Yes. Detroit.
"Do current employees have to re-apply for their current job?"
(Stramstod) No, but some paperwork will need to be filled out. The Certificate of Need basically says that employees in good standing will not have to apply to Vanguard Health Systems in order to maintain their current positions.
"Will current subcontracts stay in place?"
(Stramstod) It makes sense for those contracts to stay in place. There is no plan in place to do anything else regarding these subcontracts.
"Who will make up the $3.5 million that the City will lose in State-funded Payment in leiu of Taxes (PILOT)?"
(Mayor O'Leary) Our conservative calculations suggest that, once they (the hospital) become for-profit, there will be a tremendous revenue stream for the City of Waterbury. ("Tremendous" was not defined further, and there was no mention as to whether "tremendous" approaches, meets, or exceeds the current PILOT money. Conversely, Governor Malloy has indicated several months ago that it is his intent to end the PILOT Statewide entirely.)
"Is there a willingness to meet with the Community United in order to negotiate a community benefit agreement?"
The process with the Attorney General is designed to oversee the transfer of assets.
"There is a perception that Vanguard has refused to meet with workers of the hospital and community. Is that true?"
We're meeting on the 16th! We have had meetings with about 600 employees, the Executive Committee, the Chamber of Commerce, Community Leaders, and others.
The forum ended with many thanks and edifying remarks. Everyone in the audience seemed satisfied at having the opportunity to get answers.
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